1933 ACT FILE NO.:
1940 ACT FILE NO.: 811-21056
CIK NO.: 1662310

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

REGISTRATION STATEMENT ON FORM S-6

FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2

A. Exact name of trust: ADVISORS DISCIPLINED TRUST 1656

B. Name of depositor: ADVISORS ASSET MANAGEMENT, INC.

C. Complete address of depositor's principal executive offices:

18925 Base Camp Road
Monument, Colorado 80132

D. Name and complete address of agent for service:

WITH A COPY TO:

SCOTT COLYER SCOTT R. ANDERSON
Advisors Asset Management, Inc. Chapman and Cutler LLP
18925 Base Camp Road 111 West Monroe Street
Monument, Colorado 80132 Chicago, Illinois 60603-4080

E. Title of securities being registered: Units of undivided beneficial
interest in the trust

F. Approximate date of proposed public offering:

AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT

[ ] Check box if it is proposed that this filing will become effective
on ____________, 2016 at _____ pursuant to Rule 487.

-------------------------------------------------------------------------------

The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.

The information in this prospectus is not complete and may be changed. No one
may sell units of the trusts until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell units and is not soliciting an offer to buy units in any state
where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS DATED MARCH 11, 2016
SUBJECT TO COMPLETION

GLOBAL COVERED CALL & INCOME STRATEGIES CLOSED-END PORTFOLIO, SERIES 2016-2

INFLATION INCOME STRATEGY PORTFOLIO, SERIES 2016-2

(ADVISORS DISCIPLINED TRUST 1656)

PROSPECTUS

MAY ___, 2016

[LOGO] As with any investment, the Securities
and Exchange Commission has not approved
AAM or disapproved of these securities or
passed upon the adequacy or accuracy of
ADVISORS this prospectus. Any contrary
ASSET MANAGEMENT representation is a criminal offense.

------------------------------------------------------------
GLOBAL COVERED CALL & INCOME STRATEGIES CLOSED-END PORTFOLIO
------------------------------------------------------------

INVESTMENT OBJECTIVE

The trust seeks to provide high current income with capital appreciation as a
secondary objective. There is no assurance the trust will achieve its
objective.

PRINCIPAL INVESTMENT STRATEGY

The trust seeks to provide high current income with capital appreciation as a
secondary objective by investing in a portfolio primarily consisting of common
stock of closed-end investment companies (known as "closed-end funds") that
invest in securities of foreign and/or U.S. issuers with a focus on covered call
option strategies or other income-oriented investment strategies. Among other
securities, these funds may invest in foreign or U.S. corporate bonds,
government bonds, corporate loans, foreign currencies, preferred securities,
equity securities, call options and other similar or related securities. The
foreign issuers may be located in developed or emerging market countries.

In selecting these closed-end funds, we<F1>* considered factors such as
historical returns, income potential, potential future growth, portfolio
diversification and advisor experience. We use a disciplined investment
methodology to select the funds for inclusion in the trust. We begin by
constructing a universe of funds that have a stated investment objective in line
with the trust's investment objective and that the fund advisor appears to be
adhering to. From this universe we select the final securities by utilizing a
multi-factor approach based on the following factors:

* Premium/Discount--We favor funds that are trading at a discount relative to
their peers and relative to their historic average.

* Dividend--We favor funds that have a history of a consistent and competitive
dividend and that appear to possess the ability to keep the dividend level
intact.

* Performance--We favor funds that have an above average history of performance
based on net asset value when compared to their peers and a relevant
benchmark.

Approximately ___% of the funds in the portfolio are classified as "non-
diversified" under the Investment Company Act of 1940. These funds have the
ability to invest more than 5% of their assets in securities of a single issuer
which could reduce diversification. Under normal circumstances, the trust will
invest at least 80% of its assets in closed-end investment companies.

The closed-end funds held by the trust invest in securities of foreign and/or
U.S. issuers that focus on covered call option strategies or other income-
oriented strategies. Among other securities, the trust may invest in foreign or
U.S. corporate bonds, government bonds, corporate loans, foreign currencies,
preferred securities, equity securities, call options and other similar or
related securities. The foreign issuers may be located in developed or emerging
market countries.

Call options are contracts representing the right to purchase an asset (e.g.,
a stock) at a specified price, the strike price, at a specified future date, the
expiration date, in exchange for an option premium. The closed-end funds held
in the trust generally employ an option strategy of writing (selling) covered
call options on stocks or other securities held within the closed-end funds or
on related indices. An option is generally considered "covered" when the
closed-end funds own the securities against which the options are sold. Covered
call option writing is designed to produce income from option premiums and
offset a portion of a market decline in the underlying security. In short, a
covered call strategy may provide limited downside protection of the "covered"
security in exchange for some of the upside appreciation potential.

--------------------
<F1>* "AAM," "we" and related terms mean Advisors Asset Management, Inc., the
trust sponsor, unless the context clearly suggests otherwise.

2 Investment Summary

PRINCIPAL RISKS

As with all investments, you can lose money by investing in this trust. The
trust also might not perform as well as you expect. This can happen for reasons
such as these:

* SECURITY PRICES WILL FLUCTUATE. The value of your investment may fall over
time.

* AN ISSUER MAY BE UNWILLING OR UNABLE TO DECLARE DIVIDENDS IN THE FUTURE, OR
MAY REDUCE THE LEVEL OF DIVIDENDS DECLARED. This may result in a reduction
in the value of your units.

* THE FINANCIAL CONDITION OF AN ISSUER MAY WORSEN OR ITS CREDIT RATINGS MAY
DROP, RESULTING IN A REDUCTION IN THE VALUE OF YOUR UNITS. This may occur
at any point in time, including during the initial offering period.

* THE CALL WRITING PORTION OF THE INVESTMENT STRATEGY OF A CLOSED-END FUND MAY
NOT BE SUCCESSFUL IN THAT A FUND MAY NOT REALIZE THE FULL APPRECIATION OF
STOCKS ON WHICH THE FUND HAS WRITTEN CALL OPTIONS. The ability to
successfully implement a fund's investment strategy depends on the fund
adviser's ability to predict pertinent market movements, which cannot be
assured.

* THE VALUE OF A CALL OPTION MAY BE ADVERSELY AFFECTED BY VARIOUS FACTORS,
INCLUDING FACTORS AFFECTING THE STOCK RELATED TO THE OPTION. The value of
an option will be affected by various factors, such as changes in the value
and dividend rates of the stock subject to the option, an increase in
interest rates, a change in the actual and perceived volatility of the
stock market and the common stock, and the remaining time to expiration.
The value of a call option may be adversely affected if the market for the
option becomes less liquid or smaller.

* THE TRUST INVESTS IN SHARES OF CLOSED-END FUNDS. You should understand the
section titled "Closed-End Funds" before you invest. In particular, shares
of these funds tend to trade at a discount from their net asset value and
are subject to risks related to factors such as the manager's ability to
achieve a fund's objective, market conditions affecting a fund's
investments and use of leverage. The trust and the underlying funds have
management and operating expenses. You will bear not only your share of
the trust's expenses, but also the expenses of the underlying funds. By
investing in other funds, the trust incurs greater expenses than you would
incur if you invested directly in the funds.

* SECURITIES OF FOREIGN ISSUERS HELD BY THE UNDERLYING FUNDS IN THE TRUST
PRESENT RISKS BEYOND THOSE OF U.S. ISSUERS. These risks may include market
and political factors related to the issuer's foreign market, international
trade conditions, the global and country-specific political environment,
less regulation, smaller or less liquid markets, increased volatility,
differing accounting practices and changes in the value of foreign
currencies.

* WE DO NOT ACTIVELY MANAGE THE PORTFOLIO. While the closed-end funds have
managed portfolios, except in limited circumstances, the trust will hold,
and continue to buy, shares of the same funds even if their market value
declines.

Investment Summary 3

WHO SHOULD INVEST

You should consider this investment if you want:

* to own securities representing interests in managed funds that invest
using covered call or other income-oriented strategies and collectively
provide a globally diversified investment.

* to diversify your overall portfolio with investments in securities of
foreign and U.S. issuers.

* the potential to receive monthly distributions of income with capital
appreciation potential.

You should not consider this investment if you:

* are uncomfortable with the risks of an unmanaged investment in closed-end
funds that invest using covered call or other income-oriented strategies
and collectively provide a globally diversified investment.

* are uncomfortable with a globally-diversified investment in foreign and
U.S. issuers.

* seek capital preservation or capital appreciation as a primary objective.

-------------------------------------------------------------

ESSENTIAL INFORMATION
---------------------

UNIT PRICE AT INCEPTION $10.0000

INCEPTION DATE ____________, 2016
TERMINATION DATE ____________, ____

ESTIMATED NET ANNUAL DISTRIBUTIONS*
First year $______ per unit
Second year $______ per unit

DISTRIBUTION DATES 25th day of each month
RECORD DATES 10th day of each month

CUSIP NUMBERS
Standard Accounts
Cash distributions _________
Reinvest distributions _________
Fee Based Accounts
Cash distributions _________
Reinvest distributions _________

TICKER SYMBOL ______

MINIMUM INVESTMENT $1,000/100 units

-------------------------------------------------------------

<FN>
* As of ___________, 2016 and may vary thereafter.
</FN>

FEES AND EXPENSES

The amounts below are estimates of the direct and indirect expenses that you
may incur based on a $10 unit price. Actual expenses may vary.

AS A % AMOUNT
OF $1,000 PER 100
SALES FEE INVESTED UNITS
------------------------

Initial sales fee 1.00% $10.00
Deferred sales fee 2.45 24.50
Creation & development fee 0.50 5.00
------- -------
Maximum sales fee 3.95% $39.50
======= =======

ORGANIZATION COSTS 0.38% $3.80
======= =======

AS A % AMOUNT
ANNUAL OF NET PER 100
OPERATING EXPENSES ASSETS UNITS
------------------------

Trustee fee & expenses _.__% $_____
Supervisory, evaluation
and administration fees _.__ _____
Closed-end fund expenses _.__ _____
------- -------
Total _.__% $_____
======= =======

The initial sales fee is the difference between the total sales fee (maximum
of 3.95% of the unit offering price) and the sum of the remaining deferred sales
fee and the total creation and development fee. The deferred sales fee is fixed
at $0.245 per unit and is paid in three monthly installments beginning
____________, ____. The creation and development fee is fixed at $0.05 per unit
and is paid at the end of the initial offering period (anticipated to be
approximately three months). The trust will indirectly bear the management and
operating expenses of the underlying closed-end funds. While the trust will not
pay these expenses directly out of its assets, these expenses are shown in the
trust's annual operating expenses above to illustrate the impact of these
expenses.

EXAMPLE

This example helps you compare the cost of this trust with other unit trusts
and mutual funds. In the example we assume that the expenses do not change and
that the trust's annual return is 5%. Your actual returns and expenses will
vary. Based on these assumptions, you would pay these expenses for every
$10,000 you invest in the trust:

1 year $_____
2 years (life of trust) $_____

These amounts are the same regardless of whether you sell your investment at the
end of a period or continue to hold your investment.

4 Investment Summary

GLOBAL COVERED CALL & INCOME STRATEGIES CLOSED-END PORTFOLIO, SERIES 2016-2
(ADVISORS DISCIPLINED TRUST 1656)
PORTFOLIO
AS OF THE TRUST INCEPTION DATE, ____________, 2016

PERCENTAGE OF MARKET COST OF
NUMBER TICKER AGGREGATE OFFERING VALUE PER SECURITIES
OF SHARES SYMBOL ISSUER(1) PRICE SHARE(1) TO TRUST(2)
----------------------------------------------------------------------------------------------------------------------------------

CLOSED-END FUNDS -- 100.00%

--------- ----------
100.00% $_______
========= ==========

<FN>
Notes to Portfolio

(1) Securities are represented by contracts to purchase such securities. The
value of each security is based on the most recent closing sale price of
each security as of the close of regular trading on the New York Stock
Exchange on the business day prior to the trust's inception date. In
accordance with Accounting Standards Codification 820, "Fair Value
Measurements", the trust's investments are classified as Level 1, which
refers to security prices determined using quoted prices in active markets
for identical securities.

(2) The cost of the securities to the sponsor and the sponsor's profit or
(loss) (which is the difference between the cost of the securities to the
sponsor and the cost of the securities to the trust) are $__________ and
$__________, respectively.
</FN>

Investment Summary 5

-----------------------------------
INFLATION INCOME STRATEGY PORTFOLIO
-----------------------------------

INVESTMENT OBJECTIVE

The trust seeks to provide above average total return primarily through high
income. There is no assurance the trust will achieve its objective.

PRINCIPAL INVESTMENT STRATEGY

The trust seeks to provide high current income with capital appreciation as a
secondary objective even if inflation and/or interest rates in general, rise.
The portfolio seeks to achieve this objective by investing in five different
themes that we<F1>* believe will be able to provide the potential for stable
income and price appreciation in an inflationary environment. These five themes
are: (1) dividend-paying equities, (2) real estate investment trusts ("REITs"),
(3) master limited partnerships ("MLPs"), (4) closed-end investment companies
(known as "closed-end funds" and referred to herein as the "funds") that have
elected to be treated as business development companies under the Investment
Company Act of 1940 ("BDCs") and (5) taxable closed-end funds. We sought to
focus on entities selected based on numerous factors including current valuation
(price to earnings, price to sales, and premium/discount), current dividend
levels, historic dividend levels, historic dividend growth rates, payout ratios,
revenue and earnings growth trends, balance sheet strength and past performance.
In selecting the funds for the BDC and taxable closed-end fund themes, we
examined current holdings and selected funds based on these factors.
Approximately _____% of the portfolio consists of funds classified as "non-
diversified" under the Investment Company Act of 1940. These funds have the
ability to invest more than 5% of their assets in securities of a single issuer
which could reduce diversification.

PRINCIPAL RISKS

As with all investments, you can lose money by investing in this trust. The
trust also might not perform as well as you expect. This can happen for reasons
such as these:

* SECURITY PRICES WILL FLUCTUATE. The value of your investment may fall over
time.

* AN ISSUER MAY BE UNABLE TO MAKE INCOME AND/OR PRINCIPAL PAYMENTS, OR DECLARE
DIVIDENDS, IN THE FUTURE. This may reduce the level of income the trust
receives which would reduce your income and cause the value of your units
to fall.

* THE VALUE OF CERTAIN SECURITIES WILL GENERALLY FALL IF INTEREST RATES, IN
GENERAL, RISE. No one can predict whether interest rates will rise or fall
in the future.

* THE TRUST INVESTS IN SHARES OF CLOSED-END FUNDS. CLOSED-END FUNDS TEND TO
TRADE AT A DISCOUNT FROM THEIR NET ASSET VALUE AND ARE SUBJECT TO RISKS
RELATED TO FACTORS SUCH AS THE MANAGER'S ABILITY TO ACHIEVE A FUND'S
OBJECTIVE, MARKET CONDITIONS AFFECTING A FUND'S INVESTMENTS AND USE OF
LEVERAGE. The trust and the underlying funds have management and operating
expenses. You will bear not only your share of the trust's expenses, but
also the expenses of the underlying funds. By investing in funds, the
trust incurs greater expenses than you would incur if you invested directly
in the funds.

* THE TRUST INVESTS IN SHARES OF BDCS. In particular, BDCs are generally
leveraged which may magnify the potential for gains and losses on amounts
invested which increases the risks associated with those securities. BDCs
generally depend on the ability to access capital markets, raise cash,
acquire suitable investments and

--------------------
<F1>* "AAM," "we" and related terms mean Advisors Asset Management, Inc., the
trust sponsor, unless the context clearly suggests otherwise.

6 Investment Summary

monitor and administer those investments in order to maintain their status
as BDCs and achieve their investment objectives. A failure to do so may
adversely affect the value of the BDC shares and the value of your units.
BDCs often invest in securities that are not publicly traded which adversely
impacts their ability to value those assets and reduces the investments'
liquidity.

* THE TRUST INVESTS IN SHARES OF REITS. A REIT IS A COMPANY DEDICATED TO
OWNING AND, IN SOME CASES, OPERATING INCOME-PRODUCING REAL ESTATE. SOME
REITS ENGAGE IN FINANCING REAL ESTATE. Negative developments in the real
estate industry will affect the value of your investment greater than in a
more diversified investment.

* THE TRUST AND CERTAIN FUNDS HELD BY THE TRUST INVEST IN MLPS. MLPS ARE
LIMITED PARTNERSHIPS OR LIMITED LIABILITY COMPANIES THAT ARE GENERALLY
TAXED AS PARTNERSHIPS WITH INTERESTS TRADED ON SECURITIES EXCHANGES. Most
MLPs generally operate in the energy natural resources or real estate
sector and are subject to the risks generally applicable to companies in
those sectors. MLPs are also subject to the risk that authorities could
challenge the tax treatment of MLPs for federal income tax purposes which
could have a negative impact on the after-tax income available for
distribution by the MLPs and/or the value of the trust's investments.

* THE TRUST AND/OR THE UNDERLYING FUNDS MAY INVEST SIGNIFICANTLY IN SECURITIES
OF SMALL AND MID-SIZE COMPANIES. These securities are often more volatile
and have lower trading volumes than securities of larger companies. Small
and mid-size companies may have limited products or financial resources,
management inexperience and less publicly available information.

* THE FUNDS MAY INVEST IN UNRATED SECURITIES OR SECURITIES RATED BELOW
INVESTMENT GRADE AND ARE CONSIDERED TO BE "JUNK" SECURITIES. These
securities are considered to be speculative and are subject to greater
market and credit risks. Accordingly, the risk of default is higher than
investment grade securities. In addition, these securities may be more
sensitive to interest rate changes and may be more likely to make early
returns of principal.

* SECURITIES OF FOREIGN ISSUERS HELD BY THE TRUST AND/OR THE UNDERLYING FUNDS
IN THE TRUST PRESENT RISKS BEYOND THOSE OF U.S. ISSUERS. These risks may
include market and political factors related to the issuer's foreign
market, international trade conditions, the global and country-specific
political environment, less regulation, smaller or less liquid markets,
increased volatility, differing accounting practices and changes in the
value of foreign currencies.

Investment Summary 7

WHO SHOULD INVEST

You should consider this investment if you want:

* to own a defined portfolio of securities seeking above average return
primarily through high income with capital appreciation as a secondary
objective.

* to diversify your overall portfolio with investments in various types of
securities.

* the potential to receive income and capital appreciation.

You should not consider this investment if you:

* are uncomfortable with the risks of an unmanaged investment in the
securities held by the trust.

* are uncomfortable with the trust's investment strategy.

* seek aggressive growth without current income.

* seek capital preservation or capital appreciation as a primary objective.

------------------------------------------------------------

ESSENTIAL INFORMATION
---------------------

UNIT PRICE AT INCEPTION $10.0000

INCEPTION DATE ____________, 2016
TERMINATION DATE ____________, ____

ESTIMATED NET ANNUAL DISTRIBUTIONS
First year* $______ per unit
Second year* $______ per unit

DISTRIBUTION DATES 25th day of each month
RECORD DATES 10th day of each month

CUSIP NUMBERS
Standard Accounts
Cash distributions _________
Reinvest distributions _________
Fee Based Accounts
Cash distributions _________
Reinvest distributions _________

TICKER SYMBOL ______

MINIMUM INVESTMENT $1,000/100 units

------------------------------------------------------------

<FN>
* As of ___________, 2016 and may vary thereafter.
</FN>

FEES AND EXPENSES

The amounts below are estimates of the direct and indirect expenses that you
may incur based on a $10 unit price. Actual expenses may vary.

AS A % AMOUNT
OF $1,000 PER 100
SALES FEE INVESTED UNITS
------------------------

Initial sales fee 1.00% $10.00
Deferred sales fee 2.45 24.50
Creation & development fee 0.50 5.00
------- -------
Maximum sales fee 3.95% $39.50
======= =======

ORGANIZATION COSTS 0.38% $3.80
======= =======

AS A % AMOUNT
ANNUAL OF NET PER 100
OPERATING EXPENSES ASSETS UNITS
------------------------

Trustee fee & expenses _.__% $_____
Supervisory, evaluation
and administration fees _.__ _____
Fund expenses _.__ _____
------- -------
Total _.__% $_____
======= =======

The initial sales fee is the difference between the total sales fee (maximum
of 3.95% of the unit offering price) and the sum of the remaining deferred sales
fee and the total creation and development fee. The deferred sales fee is fixed
at $0.245 per unit and is paid in three monthly installments beginning
____________, 2016. The creation and development fee is fixed at $0.05 per unit
and is paid at the end of the initial offering period (anticipated to be
approximately three months). The trust will indirectly bear the management and
operating expenses of the underlying closed-end funds. While the trust will not
pay these expenses directly out of its assets, these expenses are shown in the
trust's annual operating expenses above to illustrate the impact of these
expenses.

EXAMPLE

1 year $_____
2 years (life of trust) $_____

These amounts are the same regardless of whether you sell your investment at
the end of a period or continue to hold your investment.INFLATION INCOME

8 Investment Summary

INFLATION INCOME STRATEGY PORTFOLIO, SERIES 2016-2
(ADVISORS DISCIPLINED TRUST 1656)
PORTFOLIO
AS OF THE TRUST INCEPTION DATE, ____________, 2016

PERCENTAGE OF
NUMBER AGGREGATE MARKET COST OF
OF TICKER OFFERING VALUE PER SECURITIES
SHARES SYMBOL ISSUER(1) PRICE SHARE(1) TO TRUST(2)
---------------------------------------------------------------------------------------------------------------------------------

EQUITY SECURITIES -- _____%

(continued)

Investment Summary 9

INFLATION INCOME STRATEGY PORTFOLIO, SERIES 2016-2
(ADVISORS DISCIPLINED TRUST 1656)
PORTFOLIO (CONTINUED)
AS OF THE TRUST INCEPTION DATE, ____________, 2016

(continued)

10 Investment Summary

INFLATION INCOME STRATEGY PORTFOLIO, SERIES 2016-2
(ADVISORS DISCIPLINED TRUST 1656)
PORTFOLIO (CONTINUED)
AS OF THE TRUST INCEPTION DATE, ____________, 2016

CLOSED-END FUNDS -- _____%

--------- ----------
100.00% $_______
========= ==========

<FN>
Notes to Portfolio

(3) These are securities of closed-end funds that have elected to be treated as
business development companies under the Investment Company Act of 1940.

(4) This is a non-income producing security.

(5) This is a security issued by a foreign company.

Equity Securities comprise approximately _____% of the investments of the
trust, broken down by country of organization as set forth below:
</FN>

Investment Summary 11

-----------------------------
UNDERSTANDING YOUR INVESTMENT
-----------------------------

HOW TO BUY UNITS

You can buy units of a trust on any business day the New York Stock Exchange
is open by contacting your financial professional. Unit prices are available
daily on the Internet at WWW.AAMLIVE.COM. The public offering price of units
includes:

* the net asset value per unit plus

* organization costs plus

* the sales fee.

The "net asset value per unit" is the value of the securities, cash and other
assets in your trust reduced by the liabilities of your trust divided by the
total units or your trust outstanding. We often refer to the public offering
price of units as the price" or "purchase price." The offer price will be
effective for all orders received prior to the close of regular trading on the
New York Stock Exchange (normally 4:00 p.m. Eastern time). If we receive your
order prior to the close of regular trading on the New York Stock Exchange or
authorized financial professionals receive your order prior to that time and
properly transmit the order to us by the time that we designate, then you will
receive the price computed on the date of receipt. If we receive your order
after the close of regular trading on the New York Stock Exchange, if authorized
financial professionals receive your order after that time or if orders are
received by such persons and are not transmitted to us by the time that we
designate, then you will receive the price computed on the date of the next
determined offer price provided that your order is received in a timely manner
on that date. It is the responsibility of the authorized financial professional
to transmit the orders that they receive to us in a timely manner. Certain
broker-dealers may charge a transaction or other fee for processing unit
purchase orders.

VALUE OF THE SECURITIES. We determine the value of the securities as of the
close of regular trading on the New York Stock Exchange on each day that
exchange is open. We generally determine the value of securities using the last
sale price for securities traded on a national securities exchange. For this
purpose, the trustee provides us closing prices from a reporting service
approved by us. In some cases we will price a security based on its fair value
after considering appropriate factors relevant to the value of the security. We
will only do this if a security is not principally traded on a national
securities exchange or if the market quotes are unavailable or inappropriate.

We determined the initial prices of the securities shown under each
"Portfolio" section in this prospectus as described above at the close of
regular trading on the New York Stock Exchange on the business day before the
date of this prospectus. On the first day we sell units we will compute the
unit price as of the close of regular trading on the New York Stock Exchange or
the time the registration statement filed with the Securities and Exchange
Commission becomes effective, if later.

ORGANIZATION COSTS. During the initial offering period, part of the value of
the units represents an amount that will pay the costs of creating your trust.
These costs include the costs of preparing the registration statement and legal
documents, a portfolio consultant's security selection fee (if any), federal and
state registration fees, the initial fees and expenses of the trustee and the
initial audit. Your trust will sell securities to reimburse us for these costs
at the end of the initial offering period or after six months, if earlier. The
value of your units will decline when your trust pays these costs.

12 Understanding Your Investment

TRANSACTIONAL SALES FEE. You pay a fee in connection with purchasing units.
We refer to this fee as the "transactional sales fee." The transactional sales
fee has both an initial and a deferred component and equals 3.45% of the public
offering price per unit based on a $10 public offering price per unit. This
percentage amount of the transactional sales fee is based on the unit price on
your trust's inception date. The transactional sales fee equals the difference
between the total sales fee and the creation and development fee. As a result,
the percentage and dollar amount of the transactional sales fee will vary as the
public offering price per unit varies. The transactional sales fee does not
include the creation and development fee which is described under "Fees and
Expenses" for your trust.

The maximum sales fee equals 3.95% of the public offering price per unit at
the time of purchase. You pay the initial sales fee at the time you buy units.
The initial sales fee is the difference between the total sales fee percentage
(maximum of 3.95% of the public offering price per unit) and the sum of the
remaining fixed dollar deferred sales fee and the total fixed dollar creation
and development fee. The initial sales fee will be approximately 1.00% of the
public offering price per unit depending on the public offering price per unit.
The deferred sales fee is fixed at $0.245 per unit. Your trust pays the
deferred sales fee in equal monthly installments as described under "Fees and
Expenses" for your trust. If you redeem or sell your units prior to collection
of the total deferred sales fee, you will pay any remaining deferred sales fee
upon redemption or sale of your units.

If you purchase units after the last deferred sales fee payment has been
assessed, the secondary market sales fee is equal to 3.95% of the public
offering price and does not include deferred payments (i.e. unitholders who buy
in the secondary market after collection of the deferred sales fee are not
charged deferred sales fees).

MINIMUM PURCHASE. The minimum amount you can purchase appears under
"Essential Information" for your trust, but such amounts may vary depending on
your selling firm.

REDUCING YOUR SALES FEE. We offer a variety of ways for you to reduce the
fee you pay. It is your financial professional's responsibility to alert us of
any discount when you order units. Except as expressly provided herein, you may
not combine discounts. Since the deferred sales fee and the creation and
development fee are fixed dollar amounts per unit, your trust must charge these
fees per unit regardless of any discounts. However, if you are eligible to
receive a discount such that your total sales fee is less than the fixed dollar
amounts of the deferred sales fee and the creation and development fee, we will
credit you the difference between your total sales fee and these fixed dollar
fees at the time you buy units.

Large Purchases. You can reduce your sales fee by increasing the size of
your investment:

IF YOU PURCHASE: YOUR FEE WILL BE:
------------------------------------------

Less than $50,000 3.95%
$50,000 - $99,999 3.70
$100,000 - $249,999 3.45
$250,000 - $499,999 3.10
$500,000 - $999,999 2.95
$1,000,000 or more 2.45

We apply these fees as a percent of the public offering price per unit at the
time of purchase. The breakpoints will be adjusted to take into consideration
purchase orders stated in dollars which cannot be completely fulfilled due to
the requirements that only whole units be issued.

Understanding Your Investment 13

You aggregate initial offering period unit orders submitted by the same
person for units of any of the trusts we sponsor on any single day from any one
broker-dealer to qualify for a purchase level. If you purchase initial offering
period units that qualify for the fee account or rollover/exchange discount
described below and also purchase additional initial offering period units on a
single day from the same broker-dealer that do not qualify for the fee account
or rollover/exchange discount, you aggregate all initial offering period units
purchased for purposes of determining the applicable breakpoint level in the
table above on the additional units, but such additional units will not qualify
for the fee account or rollover/exchange discount described below. Secondary
market unit purchases are not aggregated with initial offering period unit
purchases for purposes of determining the applicable breakpoint level. You can
also include these orders as your own for purposes of this aggregation:

* orders submitted by your spouse or children (including step-children)
under 21 years of age living in the same household and

* orders submitted by your trust estate or fiduciary accounts.

The discounts described above apply only to initial offering period
purchases.

Fee Accounts. Investors may purchase units through registered investment
advisers, certified financial planners or registered broker-dealers who in each
case either charge investor accounts ("Fee Accounts") periodic fees for
brokerage services, financial planning, investment advisory or asset management
services, or provide such services in connection with an investment account for
which a comprehensive "wrap fee" charge ("Wrap Fee") is imposed. You should
consult your financial advisor to determine whether you can benefit from these
accounts. To purchase units in these Fee Accounts, your financial advisor must
purchase units designated with one of the Fee Account CUSIP numbers, if
available. Please contact your financial advisor for more information. If
units are purchased for a Fee Account and the units are subject to a Wrap Fee in
such Fee Account (i.e., the trust is "Wrap Fee Eligible") then investors may be
eligible to purchase units in these Fee Accounts that are not subject to the
transactional sales fee but will be subject to the creation and development fee
that is retained by the sponsor. For example, this table illustrates the sales
fee you will pay as a percentage of the initial $10 public offering price per
unit (the percentage will vary with the unit price).

Initial sales fee 0.00%
Deferred sales fee 0.00%
-------
Transactional sales fee 0.00%
=======
Creation and development fee 0.50%
-------
Total sales fee 0.50%
=======

This discount applies only during the initial offering period. Certain Fee
Account investors may be assessed transaction or other fees on the purchase
and/or redemption of units by their broker-dealer or other processing
organizations for providing certain transaction or account activities. We
reserve the right to limit or deny purchases of units in Fee Accounts by
investors or selling firms whose frequent trading activity is determined to be
detrimental to a trust.

Employees. We waive the transactional sales fee for purchases made by
officers, directors and employees (and immediate family members) of the sponsor
and its affiliates. These purchases are not subject to the transactional sales
fee but will be subject to the creation and development fee. We also waive a
portion of the sales fee for purchases

14 Understanding Your Investment

made by officers, directors and employees (and immediate family members) of
selling firms. These purchases are made at the public offering price per unit
less the applicable regular dealer concession. Immediate family members for the
purposes of this section include your spouse, children (including step-children)
under the age of 21 living in the same household, and parents (including step-
parents). These discounts apply to initial offering period and secondary market
purchases. All employee discounts are subject to the policies of the related
selling firm, including but not limited to, householding policies or
limitations. Only officers, directors and employees (and their immediate family
members) of selling firms that allow such persons to participate in this
employee discount program are eligible for the discount.

Rollover/Exchange Option. We waive a portion of the sales fee on units of
the trusts offered in this prospectus if you buy your units with redemption or
termination proceeds from any unit investment trust (regardless of sponsor).
The discounted public offering price per unit for these transactions is equal to
the regular public offering price per unit less 1.00%. However, if you invest
redemption or termination proceeds of $500,000 or more in units, the maximum
sales fee on your units will be limited to the maximum sales fee for the
applicable amount invested in the table under "Large Purchases" above. To
qualify for this discount, the termination or redemption proceeds used to
purchase units of a trust offered in this prospectus must be derived from a
transaction that occurred within 30 calendar days of your purchase of units of a
trust offered in this prospectus. In addition, the discount will only be
available for investors that utilize the same broker-dealer (or a different
broker-dealer with appropriate notification) for both the unit purchase and the
transaction resulting in the receipt of the termination or redemption proceeds
used for the unit purchase. You may be required to provide appropriate
documentation or other information to your broker-dealer to evidence your
eligibility for this sales fee discount.

Please note that if you purchase units of a trust in this manner using
redemption proceeds from trusts which assess the amount of any remaining
deferred sales fee at redemption, you should be aware that any deferred sales
fee remaining on these units will be deducted from those redemption proceeds.
These discounts apply only to initial offering period purchases.

Dividend Reinvestment Plan. We do not charge any sales fee when you reinvest
distributions from your trust into additional units of your trust. This sales
fee discount applies to initial offering period and secondary market purchases.
Since the deferred sales fee and the creation and development fee are fixed
dollar amounts per unit, your trust must charge these fees per unit regardless
of this discount. If you elect the distribution reinvestment plan, we will
credit you with additional units with a dollar value sufficient to cover the
amount of any remaining deferred sales fee or creation and development fee that
will be collected on such units at the time of reinvestment. The dollar value
of these units will fluctuate over time.

RETIREMENT ACCOUNTS. Your portfolio may be suitable for purchase in tax-
advantaged retirement accounts. You should contact your financial professional
about the accounts offered and any additional fees imposed.

HOW TO SELL YOUR UNITS

You can sell or redeem your units on any business day the New York Stock
Exchange is open by contacting your financial professional. Unit prices are
available daily on the Internet at

Understanding Your Investment 15

WWW.AAMLIVE.COM or through your financial professional. The sale and redemption
price of units is equal to the net asset value per unit, provided that you will
not pay any remaining creation and development fee or organization costs if you
sell or redeem units during the initial offering period. The sale and
redemption price is sometimes referred to as the "liquidation price." You pay
any remaining deferred sales fee when you sell or redeem your units. Certain
broker-dealers may charge a transaction or other fee for processing unit
redemption or sale requests.

SELLING UNITS. We may maintain a secondary market for units. This means
that if you want to sell your units, we may buy them at the current net asset
value, provided that you will not pay any remaining creation and development fee
or organization costs if you sell units during the initial offering period. We
may then resell the units to other investors at the public offering price or
redeem them for the redemption price. Our secondary market repurchase price is
the same as the redemption price. Certain broker-dealers might also maintain a
secondary market in units. You should contact your financial professional for
current repurchase prices to determine the best price available. We may
discontinue our secondary market at any time without notice. Even if we do not
make a market, you will be able to redeem your units with the trustee on any
business day for the current redemption price.

REDEEMING UNITS. You may also redeem your units directly with the trustee,
The Bank of New York Mellon, on any day the New York Stock Exchange is open.
The redemption price that you will receive for units is equal to the net asset
value per unit, provided that you will not pay any remaining creation and
development fee or organization costs if you redeem units during the initial
offering period. You will pay any remaining deferred sales fee at the time you
redeem units. You will receive the net asset value for a particular day if the
trustee receives your completed redemption request prior to the close of regular
trading on the New York Stock Exchange. Redemption requests received by
authorized financial professionals prior to the close of regular trading on the
New York Stock Exchange that are properly transmitted to the trustee by the time
designated by the trustee, are priced based on the date of receipt. Redemption
requests received by the trustee after the close of regular trading on the New
York Stock Exchange, redemption requests received by authorized financial
professionals after that time or redemption requests received by such persons
that are not transmitted to the trustee until after the time designated by the
trustee, are priced based on the date of the next determined redemption price
provided they are received in a timely manner by the trustee on such date. It
is the responsibility of authorized financial professionals to transmit
redemption requests received by them to the trustee so they will be received in
a timely manner. If your request is not received in a timely manner or is
incomplete in any way, you will receive the next net asset value computed after
the trustee receives your completed request.

If you redeem your units, the trustee will generally send you a payment for
your units no later than seven days after it receives all necessary
documentation (this will usually only take three business days). The only time
the trustee can delay your payment is if the New York Stock Exchange is closed
(other than weekends or holidays), the Securities and Exchange Commission
determines that trading on that exchange is restricted or an emergency exists
making sale or evaluation of the securities not reasonably practicable, and for
any other period that the Securities and Exchange Commission permits.

16 Understanding Your Investment

You can request an in-kind distribution of the securities underlying your
units if you tender at least 2,500 units for redemption (or such other amount as
required by your financial professional's firm). This option is generally
available only for securities traded and held in the United States. The trustee
will make any in-kind distribution of securities by distributing applicable
securities in book entry form to the account of your financial professional at
Depository Trust Company. You will receive whole shares of the applicable
securities and cash equal to any fractional shares. You may not request this
option in the last 30 days of your trust's life. We may discontinue this option
upon sixty days notice.

EXCHANGE OPTION. You may be able to exchange your units for units of our
unit trusts at a reduced sales fee. You can contact your financial professional
for more information about trusts currently available for exchanges. Before you
exchange units, you should read the prospectus carefully and understand the
risks and fees. You should then discuss this option with your financial
professional to determine whether your investment goals have changed, whether
current trusts suit you and to discuss tax consequences. We may discontinue
this option at any time upon sixty days notice.

ROLLOVER OPTION. Your trust's strategy may be a long-term investment
strategy designed to be followed on an annual basis. You may achieve more
consistent long-term investment results by following the strategy. As part of
the strategy, we currently intend to offer a subsequent series of your trust for
a rollover when the current trust terminates. When your trust terminates you
will have the option to (1) participate in a rollover and have your units
reinvested into a subsequent trust series through a cash rollover as described
in this section, (2) receive an in-kind distribution of securities or (3)
receive a cash distribution.

If you elect to participate in a rollover, your units will be redeemed on
your trust's termination date. As the redemption proceeds become available, the
proceeds (including dividends) will be invested in a new trust series, if
available, at the public offering price for the new trust. The trustee will
attempt to sell securities to satisfy the redemption as quickly as practicable
on the termination date. We do not anticipate that the sale period will be
longer than one day, however, certain factors could affect the ability to sell
the securities and could impact the length of the sale period. The liquidity of
any security depends on the daily trading volume of the security and the amount
available for redemption and reinvestment on any day.

We intend to make subsequent trust series available for sale at various times
during the year. Of course, we cannot guarantee that a subsequent trust or
sufficient units will be available or that any subsequent trusts will offer the
same investment strategies or objectives as current trusts. We cannot guarantee
that a rollover will avoid any negative market price consequences resulting from
trading large volumes of securities. Market price trends may make it
advantageous to sell or buy securities more quickly or more slowly than
permitted by the trust procedures. We may, in our sole discretion, modify a
rollover or stop creating units of any future trust at any time regardless of
whether all proceeds of unitholders have been reinvested in a rollover. We may
decide not to offer a rollover option upon sixty days notice. Cash which has
not been reinvested in a rollover will be distributed to unitholders shortly
after the termination date. Rollover participants may receive taxable dividends
or realize taxable capital gains which are reinvested in connection with a

Understanding Your Investment 17

rollover but may not be entitled to a deduction for capital losses due to the
"wash sale" tax rules. Due to the reinvestment in a subsequent trust, no cash
will be distributed to pay any taxes. See "Understanding Your Investment--
Taxes".

DISTRIBUTIONS

MONTHLY DISTRIBUTIONS. Your trust generally pays distributions of its net
investment income along with any excess capital on each distribution date to
unitholders of record on the preceding record date. If your trust is a "grantor
trust" for federal tax purposes, the trust will generally only make a
distribution if the total cash held for distribution equals at least 0.1% of the
trust's net asset value as determined under the trust agreement. The record and
distribution dates are shown under "Essential Information" in the "Investment
Summary" section of this prospectus for each trust. In some cases, your trust
might pay a special distribution if it holds an excessive amount of cash pending
distribution. For example, this could happen as a result of a merger or similar
transaction involving a company whose stock is in your portfolio. Your trust
will also generally make required distributions or distributions to avoid
imposition of tax at the end of each year if it is structured as a "regulated
investment company" for federal tax purposes. The amount of your distributions
will vary from time to time as companies change their dividends or trust
expenses change.

When your trust receives dividends from a portfolio security, the trustee
credits the dividends to the trust's accounts. In an effort to make relatively
regular income distributions, if your trust is a "regulated investment company"
for tax purposes and makes monthly distributions, your trust's monthly income
distribution is equal to one-twelfth of the estimated net annual dividends to be
received by your trust after deduction of trust operating expenses. Because a
trust does not receive dividends from the portfolio securities at a constant
rate throughout the year, the income distributions to unitholders from such a
trust may be more or less than the amount credited to your trust accounts as of
the record date. For the purpose of minimizing fluctuation in income
distributions, the trustee is authorized to advance such amounts as may be
necessary to provide income distributions of approximately equal amounts. The
trustee will be reimbursed, without interest, for any such advances from
available income received by a trust on the ensuing record date.

ESTIMATED ANNUAL DISTRIBUTIONS. The estimated net annual distributions for
your trust is shown under "Essential Information" section of this prospectus
related to your trust. We generally base the estimate of the income your trust
may receive on annualizing the most recent ordinary dividend declared by an
issuer (or adding the most recent interim and final dividends declared for
certain foreign issuers) or on scheduled income payments. However, dividend
conventions for certain companies and/or certain countries differ from those
typically used in the United States and in certain instances, dividends paid or
declared over several years or other periods were used to estimate annual
distributions. Due to this and various other factors, actual dividends received
by your trust will most likely differ from the most recent annualized dividends
or scheduled income payments. The actual net annual distributions you will
receive will vary with changes in your trust's fees and expenses, in dividends
received and with the sale of securities.

REPORTS. The trustee or your financial professional will make available to
you a statement showing income and other receipts of your trust for each
distribution. Each year the trustee will

18 Understanding Your Investment

also provide an annual report on your trust's activity and certain tax
information. You can request copies of security evaluations to enable you to
complete your tax forms and audited financial statements for your trust, if
available.

INVESTMENT RISKS

All investments involve risk. This section describes the main risks that can
impact the value of the securities in your portfolio. You should understand
these risks before you invest. If the value of the securities falls, the value
of your units will also fall. We cannot guarantee that your trust will achieve
its objective or that your investment return will be positive over any period.

MARKET RISK is the risk that the value of the securities in your trust will
fluctuate. This could cause the value of your units to fall below your original
purchase price. Market value fluctuates in response to various factors. These
can include changes in interest rates, inflation, the financial condition of a
security's issuer, perceptions of the issuer, or ratings on a security. Even
though we supervise your portfolio, you should remember that we do not manage
your portfolio. Your trust will not sell a security solely because the market
value falls as is possible in a managed fund.

DIVIDEND PAYMENT RISK is the risk that an issuer of a security is unwilling
or unable to pay income on a security. Stocks represent ownership interests in
the issuers and are not obligations of the issuers. Common stockholders have a
right to receive dividends only after the company has provided for payment of
its creditors, bondholders and preferred stockholders. Common stocks do not
assure dividend payments. Dividends are paid only when declared by an issuer's
board of directors and the amount of any dividend may vary over time.

SELECTION RISK. Selection risk is the risk that the securities selected for
inclusion by your trust or by a fund's management will underperform the markets,
relevant indices or the securities selected by other funds with similar
investment objectives and investment strategies. This means you may lose money
or earn less money than other comparable investments.

EQUITY SECURITIES. Your trust and/or certain funds held by your trust may
invest in securities representing equity ownership of a company. Investments in
such securities are exposed to risks associated with the companies issuing the
securities, the sectors and geographic locations they are involved in and the
markets that such securities are traded on among other risks as described
herein.

FIXED INCOME SECURITIES. Certain funds held by your trust may invest in
fixed income securities and similar securities. Fixed income securities involve
certain unique risks such as credit risk and interest rate risk among other
things as described in greater detail below.

Understanding Your Investment 19

CREDIT RISK is the risk that a borrower is unable to meet its obligation to
pay principal or interest on a security held by a fund. This could cause the
value of your units to fall and may reduce the level of dividends a fund pays
which would reduce your income.

INTEREST RATE RISK is the risk that the value of fixed income securities and
similar securities held by a fund will fall if interest rates increase. Bonds
and other fixed income securities typically fall in value when interest rates
rise and rise in value when interest rates fall. Securities with longer periods
before maturity are often more sensitive to interest rate changes. The
securities in your trust may be subject to a greater risk of rising interest
rates than would normally be the case due to the current period of historically
low rates.

CLOSED-END FUNDS. Your portfolio invests in shares of closed-end investment
companies. Closed-end funds are subject to various risks, including but not
limited to management's ability to meet the closed-end fund's investment
objective including when the underlying securities are redeemed or sold, risks
associated with the use of leverage and borrowing and risks associated with
shares of the fund trading at a discount or premium to the fund's net asset
value. You should understand the section titled "Understanding Your Investment-
-Closed-End Funds" before you invest.

NON-DIVERSIFICATION RISK. Certain funds held by your trust may be classified
as "non-diversified". Such funds may be more exposed to the risks associated
with and developments affecting an individual issuer, industry and/or asset
class than a fund that invests more widely.

BUSINESS DEVELOPMENT COMPANY RISK. Your trust and/or certain funds held by
your trust may invest in business development companies ("BDCs"). BDCs are
closed-end investment companies that have elected to be treated as business
development companies under the Investment Company Act of 1940. BDCs are
required to hold at least 70% of their investments in eligible assets which
include, among other things, (i) securities of eligible portfolio companies
(generally, domestic companies that are not investment companies and that cannot
have a class of securities listed on a national securities exchange or have
securities that are marginable that are purchased from that company in a private
transaction), (ii) securities received by the BDC in connection with its
ownership of securities of eligible portfolio companies, or (iii) cash, cash
items, government securities, or high quality debt securities maturing one year
or less from the time of investment. BDCs' ability to grow and their overall
financial condition is impacted significantly by their ability to raise capital.
In addition to raising capital through the issuance of common stock, BDCs may
engage in borrowing. This may involve using revolving credit facilities, the
securitization of loans through separate wholly-owned subsidiaries and issuing
of debt and preferred securities. BDCs are less restricted than other closed-
end funds as to the amount of debt they can have outstanding. These borrowings,
also known as leverage, magnify the potential for gain or loss on amounts
invested and, accordingly, the risks associated with investing in BDC
securities. While the value of a BDC's assets increases, leveraging would cause
the net value per share of BDC common stock to increase more sharply than it
would have had such BDC not leveraged. However, if the value of a BDC's assets
decreases, leveraging would cause net asset value to decline more sharply than
it otherwise would have had such BDC not leveraged. In addition to decreasing
the value of a BDC's common stock, it could also adversely impact a

20 Understanding Your Investment

BDC's ability to make dividend payments. A BDC's credit rating may change over
time which could adversely affect their ability to obtain additional credit
and/or increase the cost of such borrowing. Agreements governing BDC's credit
facilities and related funding and service agreements may contain various
covenants that limit the BDC's discretion in operating its business along with
other limitations. Any defaults may restrict the BDC's ability to manage assets
securing related assets which may adversely impact the BDC's liquidity and
operations. BDCs may enter into hedging transaction and utilize derivative
instruments such as forward contracts, options and swaps. Unanticipated
movements and improper correlation of hedging instruments may prevent a BDC from
hedging against exposure to risk of loss. BDCs may issue options, warrants, and
rights to convert to voting securities to its officers, employees and board
members. Any issuance of derivative securities requires the approval of the
company's board of directors and authorization by the company's shareholders. A
BDC may operate a profit-sharing plan for its employees, subject to certain
restrictions.

BDC investments are frequently not publicly traded and, as a result, there is
uncertainty as to the value and liquidity of those investments. BDCs may use
independent valuation firms to value their investments and such valuations may
be uncertain, be based on estimates and/or differ materially from that which
would have been used if a ready market for those investments existed. The value
of a BDC could be adversely affected if its determinations regarding the fair
value of investments was materially higher than the value realized upon sale of
such investments. Due to the relative illiquidity of certain BDC investments,
if a BDC is required to liquidate all or a portion of its portfolio quickly, it
may realize significantly less than the value at which such investments are
recorded. Further restrictions may exist on the ability to liquidate certain
assets to the extent that subsidiaries or related parties have material non-
public information regarding such assets. BDCs are required to make available
significant managerial assistance to their portfolio companies. Significant
managerial assistance refers to any arrangement whereby a BDC provides
significant guidance and counsel concerning the management, operations, or
business objectives and policies of a portfolio company. Examples of such
activities include arranging financing, managing relationships with financing
sources, recruiting management personnel, and evaluating acquisition and
divestiture opportunities. BDCs are frequently externally managed by an
investment adviser which may also provide this external managerial assistance to
portfolio companies. Such investment adviser's liability may be limited under
their investment advisory agreement which may lead such investment adviser to
act in a riskier manner than it would were it investing for its own account.
Such investment advisers may be entitled to incentive compensation which may
cause such adviser to make more speculative and riskier investments than it
would if investing for its own account. Such compensation may be due even in
the case of declines to the value of a BDC's investments.

BDCs frequently have high expenses which may include, but are not limited to,
the payment of management fees, administration expenses, taxes, interest payable
on debt, governmental charges, independent director fees and expenses, valuation
expenses, and fees payable to third parties relating to or associated with
making investments. If your trust invests in BDCs, then your trust will
indirectly bear these expenses. These expenses may fluctuate significantly over
time. If a BDC fails to maintain its status as a BDC it may be regulated as a
closed-end fund which

Understanding Your Investment 21

would subject such BDC to additional regulatory restrictions and significantly
decrease its operating flexibility. In addition, such failure could trigger an
event of default under certain outstanding indebtedness which could have a
material adverse impact on its business.

INVESTMENT IN OTHER INVESTMENT COMPANIES. As with other investments,
investments in other investment companies are subject to market and selection
risk. In addition, if/when your trust acquires shares of investment companies
shareholders bear both their proportionate share of fees and expenses in your
trust and, indirectly, the expenses of the underlying investment companies.
Investment companies' expenses are subject to the risk of fluctuation including
in response to fluctuation in a fund's assets. Accordingly, a fund's actual
expenses may vary from what is indicated at the time of investment by your
trust. There are certain regulatory limitations on the ability of your trust to
hold other investment companies which may impact the trust's ability to invest
certain funds, may impact the weighting of a fund in your trust's portfolio and
may impact your trust's ability to issue additional units in the future.

CONCENTRATION RISK is the risk that the value of your trust is more
susceptible to fluctuations based on factors that impact a particular sector
because the exposure to such sectors through the securities held by your trust
or through the securities in the funds held by your trust are concentrated
within a particular sector.

FOREIGN ISSUER RISK. Your trust and/or certain funds held by your trust may
invest in the securities of foreign issuers. An investment in securities of
foreign issuers involves certain risks that are different in some respects from
an investment in securities of domestic issuers. These include risks associated
with future political and economic developments, international trade conditions,
foreign withholding taxes, liquidity concerns, currency fluctuations,
volatility, restrictions on foreign investments and exchange of securities,
potential for expropriation of assets, confiscatory taxation, difficulty in
obtaining or enforcing a court judgment, potential inability to collect when a
company goes bankrupt and economic, political or social instability. Moreover,
individual foreign economies may differ favorably or unfavorably from the U.S.
economy for reasons including differences in growth of gross domestic product,
rates of inflation, capital reinvestment, resources, self-sufficiency and
balance of payments positions There may be less publicly available information
about a foreign issuer than is available from a domestic issuer as a result of
different accounting, auditing and financial reporting standards. Some foreign
markets are less liquid than U.S. markets which could cause securities to be
bought at a higher price or sold at a lower price than would be the case in a
highly liquid market.

Brokerage and other transaction costs on foreign exchanges are often higher
than in the U.S. and there is generally less governmental supervision of
exchanges, brokers and issuers in foreign countries. The increased expense of
investing in foreign markets may reduce the amount an investor can earn on its
investments and typically results in a higher operating expense ratio than
investments in only domestic securities. Custody of certain securities may be
maintained by a global custody and clearing institution. Settlement and
clearance procedures in certain foreign markets differ significantly from those
in the U.S. Foreign settlement and clearance procedures and trade regulations
also may involve certain risks (such as delays in payment for or delivery of
securities) not typically associated with the settlement of domestic securities.
Round lot trading requirements exist in certain foreign securities markets

22 Understanding Your Investment

which could cause the proportional composition and diversification of your
trust's and/or a fund's portfolio to vary when your trust or a fund buys or
sells securities.

CURRENCY RISK. Because securities of foreign issuers not listed on a U.S.
securities exchange generally pay income and trade in foreign currencies, the
U.S. dollar value of these securities and income will vary with fluctuations in
foreign exchange rates. Most foreign currencies have fluctuated widely in value
against the U.S. dollar for various economic and political reasons. Generally,
when the U.S. dollar rises in value against a foreign currency, a security
denominated in that currency loses value because the currency is worth fewer
U.S. dollars. Conversely, when the U.S. dollar decreases in value against a
foreign currency, a security denominated in that currency gains value because
the currency is worth more U.S. dollars. This risk, generally known as
"currency risk," means that a strong U.S. dollar will reduce returns for U.S.
investors while a weak U.S. dollar will increase those returns.

DEPOSITARY RECEIPTS RISK. Certain stocks held by your trust and/or the
closed-end funds may be held in the form of depositary receipts. Depositary
receipts represent receipts for foreign common stock deposited with a custodian
(which may include the trustee of your trust). Depositary receipts generally
involve the same types of risks as foreign common stock held directly. Some
depositary receipts may experience less liquidity than the underlying common
stocks traded in their home market. Certain depositary receipts are unsponsored
(i.e. issued without the participation or involvement of the issuer of the
underlying security). The issuers of unsponsored depositary receipts are not
obligated to disclose information that may be considered material in the U.S.
Therefore, there may be less information available regarding these issuers and,
as a result, there may not be a correlation between certain information
impacting a security and the market value of the depositary receipts.

EMERGING MARKETS. Your trust and/or certain funds held by your trust may
invest in certain securities issued by entities located in emerging markets.
Emerging markets are generally defined as countries in the initial states of
their industrialization cycles with low per capita income. The markets of
emerging markets countries are generally more volatile than the markets of
developed countries with more mature economies. All of the risks of investing
in foreign securities described above are heightened by investing in emerging
markets countries.

SUPRANATIONAL ENTITIES' SECURITIES. Certain funds held by your trust may
invest in obligations issued by supranational entities such as the International
Bank for Reconstruction and Development (the World Bank). The government
members, or "stockholders," usually make initial capital contributions to
supranational entities and in many cases are committed to make additional
capital contributions if a supranational entity is unable to repay its
borrowings. There is no guarantee that one or more stockholders of a
supranational entity will continue to make any necessary additional capital
contributions. If such contributions are not made, the entity may be unable to
pay interest or repay principal on its debt securities, and a fund may lose
money on such investments.

SMALL AND MID-SIZE COMPANIES. Your trust and/or certain funds held by your
trust may invest in stocks issued by small and mid-size companies. The share
prices of these companies are often more volatile than those of larger companies
as a result of several factors common to many

Understanding Your Investment 23

such issuers, including limited trading volumes, products or financial
resources, management inexperience and less publicly available information. In
particular, companies with smaller capitalizations may be less financially
secure, depend on a smaller number of key personnel and generally be subject to
more unpredictable price changes than larger, more established companies and the
markets as a whole. Smaller capitalization and emerging growth companies may be
particularly sensitive to changes in interest rates, borrowing costs and
earnings.

BOND QUALITY RISK is the risk that a bond will fall in value if a rating
agency decreases or withdraws the bond's rating.

PREPAYMENT RISK. When interest rates fall, among other factors, the issuer
of a security may prepay their obligations earlier than expected. Such
prepayments will result in early distributions to a fund holding such security
and such funds may be unable to reinvest such amounts at the yields originally
invested which could adversely impact the funds and the trust. Certain bonds
held by the funds may include call provisions which expose such funds and your
trust to call risk. Call risk is the risk that the issuer prepays or "calls" a
bond before its stated maturity. An issuer might call a bond if interest rates,
in general fall and the bond pays a higher interest rate or if it no longer
needs the money for the original purpose. If an issuer calls a bond, a fund
holding such bond will receive principal but future interest distributions will
fall. Such fund might not be able to reinvest this principal at as high a
yield. A bond's call price could be less than the price paid for the bond and
could be below the bond's par value. Certain bonds may also be subject to
extraordinary optional or mandatory redemptions if certain events occur, such as
certain changes in tax laws, the substantial damage or destruction by fire or
other casualty of the project for which the proceeds of the bonds were used, and
various other events.

EXTENSION RISK. When interest rates rise, among other factors, issues of a
security may pay off obligations more slowly than expected causing the value of
such obligations to fall.

MARKET DISCOUNT. Certain funds held by your trust may invest in bonds whose
current market values were below the principal value on the purchase date. A
primary reason for the market value of such bonds being less than the principal
value is that the interest rate of such bonds is at a lower rate than the
current market interest rates for comparable bonds. Bonds selling at market
discounts tend to increase in market value as they approach maturity.

PREMIUM BONDS. Certain funds held by the trust may invest in bonds whose
current market values were above the principal value on the purchase date. A
primary reason for the market value of such bonds being higher than the
principal value is that the interest rate of such bonds is at a higher rate than
the current market interest rates for comparable bonds. The current returns of
bonds trading at a market premium are initially higher than the current returns
of comparable bonds issued at currently prevailing interest rates because
premium bonds tend to decrease in market value as they approach maturity when
the principal value becomes payable. Because part of the purchase price is
effectively returned not at maturity but through current income payments, early
redemption of a premium bond at par or any other amount below the purchase price
will result in a reduction in yield. Redemption pursuant to call provisions
generally will, and redemption pursuant to sinking fund provisions may occur at
times when the bonds have a market value that represents a premium over par or,
for

24 Understanding Your Investment

original issue discount securities, a premium over the accreted value.

MUNICIPAL BONDS. Certain funds held by your trust may invest in municipal
bonds. Municipal bonds are debt obligations issued by states or by political
subdivisions or authorities of states. Municipal bonds are typically designated
as general obligation bonds, which are general obligations of a governmental
entity that are backed by the taxing power of such entity, or revenue bonds,
which are payable from the income of a specific project or authority and are not
supported by the issuer's power to levy taxes. Municipal bonds are long-term
fixed rate debt obligations that generally decline in value with increases in
interest rates, when an issuer's financial condition worsens or when the rating
on a bond is decreased. Many municipal bonds may be called or redeemed prior to
their stated maturity, an event which is more likely to occur when interest
rates fall. In such an occurrence, a fund may not be able to reinvest the money
it receives in other bonds that have as high a yield or as long a maturity.
Many municipal bonds are subject to continuing requirements as to the actual use
of the bond proceeds or manner of operation of the project financed from bond
proceeds that may affect the exemption of interest on such bonds from federal
income taxation. The market for municipal bonds is generally less liquid than
for other securities and therefore the price of municipal bonds may be more
volatile and subject to greater price fluctuations than securities with greater
liquidity. In addition, an issuer's ability to make income distributions
generally depends on several factors including the financial condition of the
issuer and general economic conditions. Any of these factors may negatively
impact the price of municipal bonds held by a fund and would therefore impact
the price of both the fund shares and your trust units.

SOVEREIGN DEBT. Certain funds held by your trust may invest in sovereign
debt. Sovereign debt instruments are subject to the risk that a governmental
entity may delay or refuse to pay interest or repay principal on its sovereign
debt, due, for example, to cash flow problems, insufficient foreign currency
reserves, political considerations, the relative size of the governmental
entity's debt position in relation to the economy or the failure to put in place
required economic reforms. If a governmental entity defaults, it may ask for
more time in which to pay or for further loans. There is no legal process for
collecting sovereign debt that a government does not pay nor are there
bankruptcy proceedings through which all or part of the sovereign debt that a
governmental entity has not repaid may be collected.

U.S. GOVERNMENT OBLIGATIONS RISK. Certain funds held by your trust may
invest in obligations of the U.S. Government. Obligations of U.S. Government
agencies, authorities, instrumentalities and sponsored enterprises have
historically involved little risk of loss of principal if held to maturity.
However, not all U.S. Government securities are backed by the full faith and
credit of the United States. Obligations of certain agencies, authorities,
instrumentalities and sponsored enterprises of the U.S. Government are backed by
the full faith and credit of the United States (e.g., the Government National
Mortgage Association); other obligations are backed by the right of the issuer
to borrow from the U.S. Treasury (e.g., the Federal Home Loan Banks) and others
are supported by the discretionary authority of the U.S. Government to purchase
an agency's obligations. Still others are backed only by the credit of the
agency, authority, instrumentality or sponsored enterprise issuing the
obligation. No assurance can be given that the U.S. Government would provide
financial support to any of these entities if it is not obligated to do so by
law.

Understanding Your Investment 25

U.S. TREASURY OBLIGATIONS. Certain funds held by your trust may invest in
U.S. Treasury obligations. U.S. Treasury obligations are direct obligations of
the United States which are backed by the full faith and credit of the United
States. The value of U.S. Treasury obligations will be adversely affected by
decreases in bond prices and increases in interest rates.

HIGH YIELD OR "JUNK" SECURITIES. Certain funds held by your trust may invest
in high yield securities or unrated securities. High yield, high risk
securities are subject to greater market fluctuations and risk of loss than
securities with higher investment ratings. The value of these securities will
decline significantly with increases in interest rates, not only because
increases in rates generally decrease values, but also because increased rates
may indicate an economic slowdown. An economic slowdown, or a reduction in an
issuer's creditworthiness, may result in the issuer being unable to maintain
earnings at a level sufficient to maintain interest and principal payments.
High yield or "junk" securities, the generic names for securities rated below
"BBB" by Standard & Poor's or "Baa" by Moody's, are frequently issued by
corporations in the growth stage of their development or by established
companies who are highly leveraged or whose operations or industries are
depressed. Securities rated below BBB or Baa are considered speculative as
these ratings indicate a quality of less than investment grade. Because high
yield securities are generally subordinated obligations and are perceived by
investors to be riskier than higher rated securities, their prices tend to
fluctuate more than higher rated securities and are affected by short-term
credit developments to a greater degree. The market for high-yield securities
is smaller and less liquid than that for investment grade securities. High
yield securities are generally not listed on a national securities exchange but
trade in the over-the-counter markets. Due to the smaller, less liquid market
for high yield securities, the bid-offer spread on such securities is generally
greater than it is for investment grade securities and the purchase or sale of
such securities may take longer to complete.

SENIOR LOANS. Certain funds held by your trust may invest in senior loans
and similar transactions. Senior loans are issued by banks, other financial
institutions and other investors to corporations, partnerships, limited
liability companies and other entities to finance leveraged buyouts,
recapitalizations, mergers, acquisitions, stock repurchases, debt refinancings
and, to a lesser extent, for general operating and other purposes. An
investment by the funds in senior loans and similar transactions involves risk
that the borrowers under such transactions may default on their obligations to
pay principal or interest when due. Although senior loans may be secured by
specific collateral, there can be no assurance that liquidation of collateral
would satisfy the borrower's obligation in the event of non-payment or that such
collateral could be readily liquidated. Senior loans are typically structured
as floating rate instruments in which the interest rate payable on the
obligation fluctuates with interest rate changes. As a result, the yield on
funds investing in senior loans will generally decline in a falling interest
rate environment and increase in a rising interest rate environment. Senior
loans are generally below investment grade quality and may be unrated at the
time of investment; are generally not registered with the SEC or state
securities commissions; and are generally not listed on any securities exchange.
In addition, the amount of public information available on senior loans is
generally less extensive than that available for other types of securities.

CONVERTIBLE SECURITIES. Certain funds held by your trust may invest in
convertible securities. Convertible securities generally offer lower interest

26 Understanding Your Investment

or dividend yields than non-convertible fixed-income securities of similar
credit quality because of the potential for capital appreciation. The market
values of convertible securities tend to decline as interest rates increase and,
conversely, to increase as interest rates decline. However, a convertible
security's market value also tends to reflect the market price of the common
stock of the issuing company, particularly when that stock price is greater than
the convertible security's "conversion price." The conversion price is defined
as the predetermined price or exchange ratio at which the convertible security
can be converted or exchanged for the underlying common stock. As the market
price of the underlying common stock declines below the conversion price, the
price of the convertible security tends to be increasingly influenced more by
the yield of the convertible security. Thus, it may not decline in price to the
same extent as the underlying common stock. In the event of a liquidation of
the issuing company, holders of convertible securities would be paid before that
company's common stockholders. Consequently, an issuer's convertible securities
generally entail less risk than its common stock. However, convertible
securities fall below debt obligations of the same issuer in order of preference
or priority in the event of a liquidation and are typically unrated or rated
lower than such debt obligations.

Mandatory convertible securities are distinguished as a subset of convertible
securities because the conversion is not optional and the conversion price at
maturity is based solely upon the market price of the underlying common stock,
which may be significantly less than par or the price (above or below par) paid.
For these reasons, the risks associated with investing in mandatory convertible
securities most closely resemble the risks inherent in common stocks. Mandatory
convertible securities customarily pay a higher coupon yield to compensate for
the potential risk of additional price volatility and loss upon conversion.
Because the market price of a mandatory convertible security increasingly
corresponds to the market price of its underlying common stock, as the
convertible security approaches its conversion date, there can be no assurance
that the higher coupon will compensate for a potential loss.

FLOATING RATE INSTRUMENTS. Certain funds held by your trust may invest in
floating rate securities. A floating rate security is an instrument in which
the interest rate payable on the obligation fluctuates on a periodic basis based
upon changes in a benchmark, often related to interest rates. As a result, the
yield on such a security will generally decline with negative changes to the
benchmark, causing the trust to experience a reduction in the income it receives
from such securities. A sudden and significant increase in the applicable
benchmark may increase the risk of payment defaults and cause a decline in the
value of the security.

ASSET-BACKED SECURITIES. Certain funds held by your trust may invest in
asset-backed securities ("ABS"). ABS are securities backed by pools of loans or
other receivables. ABS are created from many types of assets, including auto
loans, credit card receivables, home equity loans, and student loans. ABS are
issued through special purpose vehicles that are bankruptcy remote from the
issuer of the collateral. The credit quality of an ABS transaction depends on
the performance of the underlying assets. To protect ABS investors from the
possibility that some borrowers could miss payments or even default on their
loans, ABS include various forms of credit enhancement. Some ABS, particularly
home equity loan transactions, are subject to interest rate risk and prepayment
risk. A change in interest rates can affect the pace of payments on the
underlying loans, which

Understanding Your Investment 27

in turn, affects total return on the securities. ABS also carry credit or
default risk. If many borrowers on the underlying loans default, losses could
exceed the credit enhancement level and result in losses to investors in an ABS
transaction. Finally, ABS have structure risk due to a unique characteristic
known as early amortization, or early payout, risk. Built into the structure of
most ABS are triggers for early payout, designed to protect investors from
losses. These triggers are unique to each transaction and can include: a big
rise in defaults on the underlying loans, a sharp drop in the credit enhancement
level, or even the bankruptcy of the originator. Once early amortization
begins, all incoming loan payments (after expenses are paid) are used to pay
investors as quickly as possible based upon a predetermined priority of payment.

MORTGAGE-BACKED SECURITIES. Certain funds held by your trust may invest in
mortgage-backed securities. Mortgage-backed securities are a type of ABS
representing direct or indirect participations in, or are secured by and payable
from, mortgage loans secured by real property and can include single- and multi-
class pass-through securities and collateralized mortgage obligations.
Mortgage-backed securities are based on different types of mortgages, including
those on commercial real estate or residential properties. These securities
often have stated maturities of up to thirty years when they are issued,
depending upon the length of the mortgages underlying the securities. In
practice, however, unscheduled or early payments of principal and interest on
the underlying mortgages may make the securities' effective maturity shorter
than this. Rising interest rates tend to extend the duration of mortgage-backed
securities, making them more sensitive to changes in interest rates, and may
reduce the market value of the securities. In addition, mortgage-backed
securities are subject to prepayment risk, the risk that borrowers may pay off
their mortgages sooner than expected, particularly when interest rates decline.
This can reduce the funds', and therefore your trust's, returns because the
funds may have to reinvest that money at lower prevailing interest rates.

RESTRICTED SECURITIES. Certain funds held by your trust may invest in
securities that may only be resold pursuant to Rule 144A under the Securities
Act of 1933. Such securities may not be readily marketable. Restricted
securities may be sold only to purchasers meeting certain eligibility
requirements in privately negotiated transactions or in a public offering with
respect to which a registration statement is in effect under the Securities Act.
Where registration of such securities under the Securities Act is required, a
fund may be obligated to pay all or part of the registration expenses and a
considerable period may elapse between the time of the decision to sell and the
time the fund may be permitted to sell a security under an effective
registration statement. If, during such a period, adverse market conditions
were to develop, the fund might obtain a less favorable price than that which
prevailed when it decided to sell.

LIQUIDITY RISK is the risk that the value of a security will fall if trading
in the security is limited or absent. No one can guarantee that a liquid
trading market will exist for any security.

COVERED CALL OPTION STRATEGIES. Certain funds held by your trust may invest
using covered call option strategies. You should understand the risks of these
strategies before you invest. In employing a covered call strategy, a closed-
end fund will generally write (sell) call options on a significant portion of
the fund's managed assets. These call options will give the option holder the
right, but not the obligation, to purchase a security from the fund at the
strike price on or prior to the option's expiration date. The ability to
successfully implement the fund's investment strategy

28 Understanding Your Investment

depends on the fund adviser's ability to predict pertinent market movements,
which cannot be assured. Thus, the use of options may require a fund to sell
portfolio securities at inopportune times or for prices other than current
market values, may limit the amount of appreciation the fund can realize on an
investment, or may cause the fund to hold a security that it might otherwise
sell. The writer (seller) of an option has no control over the time when it may
be required to fulfill its obligation as a writer (seller) of the option. Once
an option writer (seller) has received an exercise notice, it cannot effect a
closing purchase transaction in order to terminate its obligation under the
option and must deliver the underlying security at the exercise price. As the
writer (seller) of a covered call option, a fund forgoes, during the option's
life, the opportunity to profit from increases in the market value of the
security underlying the call option above the sum of the premium and the strike
price of the call option, but has retained the risk of loss should the price of
the underlying security decline. The value of the options written (sold) by a
fund, which will be marked-to-market on a daily basis, will be affected by
changes in the value and dividend rates of the underlying securities, an
increase in interest rates, changes in the actual or perceived volatility of
securities markets and the underlying securities and the remaining time to the
options' expiration. The value of the options may also be adversely affected if
the market for the options becomes less liquid or smaller.

An option is generally considered "covered" if a fund owns the security
underlying the call option or has an absolute and immediate right to acquire
that security without additional cash consideration (or, if required, liquid
cash or other assets are segregated by the fund) upon conversion or exchange of
other securities held by the fund. In certain cases, a call option may also be
considered covered if a fund holds a call option on the same security as the
call option written (sold) provided that certain conditions are met. By writing
(selling) covered call options, a fund generally seeks to generate income, in
the form of the premiums received for writing (selling) the call options.
Investment income paid by a fund to its shareholders (such as the trust) may be
derived primarily from the premiums it receives from writing (selling) call
options and, to a lesser extent, from the dividends and interest it receives
from the equity securities or other investments held in the fund's portfolio and
short-term gains thereon. Premiums from writing (selling) call options and
dividends and interest payments made by the securities in a fund's portfolio can
vary widely over time.

PREFERRED SECURITIES. Certain funds held by your trust may invest in
preferred securities including preferred stocks, trust preferred securities or
other similar securities. Preferred stocks are unique securities that combine
some of the characteristics of both common stocks and bonds. Preferred stocks
generally pay a fixed rate of return and are sold on the basis of current yield,
like bonds. However, because they are equity securities, preferred stocks
provide equity ownership of a company and the income is paid in the form of
dividends. Preferred stocks typically have a yield advantage over common stocks
as well as comparably-rated fixed income investments. Preferred stocks are
typically subordinated to bonds and other debt instruments in a company's
capital structure, in terms of priority to corporate income, and therefore will
be subject to greater credit risk than those debt instruments.

Trust preferred securities are limited-life preferred securities typically
issued by corporations, generally in the form of interest-bearing notes or
preferred securities, or by an affiliated business

Understanding Your Investment 29

trust of a corporation, generally in the form of beneficial interests in
subordinated debentures or similarly structured securities. Distribution
payments of the trust preferred securities generally coincide with interest
payments on the underlying obligations. Trust preferred securities generally
have a yield advantage over traditional preferred stocks, but unlike preferred
stocks, in some cases distributions are treated as interest rather than
dividends for federal income tax purposes and therefore, are not eligible for
the dividends-received deduction. Trust preferred securities prices fluctuate
for several reasons including changes in investors' perception of the financial
condition of an issuer or the general condition of the market for trust
preferred securities, or when political or economic events affecting the issuers
occur. Trust preferred securities are also sensitive to interest rate
fluctuations, as the cost of capital rises and borrowing costs increase in a
rising interest rate environment and the risk that a trust preferred security
may be called for redemption in a falling interest rate environment. Trust
preferred securities are also subject to unique risks which include the fact
that dividend payments will only be paid if interest payments on the underlying
obligations are made, which interest payments are dependent on the financial
condition of the issuer and may be deferred for up to 20 consecutive quarters.
During any deferral period, investors are generally taxed as if they had
received current income. In such a case, an investor will have income taxes due
prior to receiving cash distributions to pay such taxes. In addition, the
underlying obligations, and thus the trust preferred securities, may be prepaid
after a stated call date or as a result of certain tax or regulatory events.
Preferred securities are typically subordinated to bonds and other debt
instruments in a company's capital structure, in terms of priority to corporate
income, and therefore will be subject to greater credit risk than those debt
instruments.

REAL ESTATE RELATED SECURITIES. Your trust and/or certain funds held by the
trust may invest in securities providing exposure to real estate investments.
Risks associated with the ownership of real estate include, among other factors,
changes in general U.S., global and local economic conditions, decline in real
estate values, changes in the financial health of tenants, overbuilding and
increased competition for tenants, oversupply of properties for sale, changing
demographics, changes in interest rates, tax rates and other operating expenses,
changes in government regulations, faulty construction and the ongoing need for
capital improvements, regulatory and judicial requirements, including relating
to liability for environmental hazards, changes in neighborhood values and buyer
demand, and the unavailability of construction financing or mortgage loans at
rates acceptable to developers.

REAL ESTATE INVESTMENT TRUSTS. Your trust and/or certain funds held by the
trust may invest in securities issued by real estate investment trusts
("REITs"). Many factors can have an adverse impact on the performance of a
particular REIT, including its cash available for distribution, the credit
quality of a particular REIT or the real estate industry generally. The success
of a REIT depends on various factors, including the occupancy and rent levels,
appreciation of the underlying property and the ability to raise rents on those
properties. Economic recession, overbuilding, tax law changes, higher interest
rates or excessive speculation can all negatively impact REITs, their future
earnings and share prices. Variations in rental income and space availability
and vacancy rates in terms of supply and demand are additional factors affecting
real estate generally and REITs in particular. Properties owned by a REIT may
not be adequately insured against certain losses and may be subject to
significant environmental liabilities, including remediation costs. You

30 Understanding Your Investment

should also be aware that REITs may not be diversified and are subject to the
risks of financing projects. The real estate industry may be cyclical, and, if
a fund acquires REIT securities at or near the top of the cycle, there is
increased risk of a decline in value of the REIT securities. Recent demand for
certain types of real estate may have inflated the value of real estate. This
may increase the risk of a substantial decline in the value of such real estate
and increase the risk of a decline in the value of the securities. REITs are
also subject to defaults by borrowers and the market's perception of the REIT
industry generally. Because of their structure, and a current legal requirement
that they distribute at least 90% of their taxable income to shareholders
annually, REITs require frequent amounts of new funding, through both borrowing
money and issuing stock. Thus, REITs historically have frequently issued
substantial amounts of new equity shares (or equivalents) to purchase or build
new properties. This may have adversely affected REIT equity share market
prices. Both existing and new share issuances may have an adverse effect on
these prices in the future, especially if REITs continue to issue stock when
real estate prices are relatively high and stock prices are relatively low.

MLPS. Your trust and/or certain funds held by the trust invest significantly
in master limited partnerships ("MLPs"). MLPs are limited partnership or
limited liability companies that are generally taxed as partnership whose
interests are generally traded on securities exchanges. An MLP consists of a
general partner and limited partners. The general partner manages the
partnership, has an ownership stake in the partnership and is eligible to
receive an incentive distribution. The limited partners provide capital to the
partnership, have a limited (if any) role in the operation and management of the
partnership and receive cash distributions. Unlike stockholders of a
corporation, limited partners do not elect directors annually and generally have
the right to vote only on certain significant events, such as mergers, a sale of
substantially all of the partnership assets, removal of the general partner or
material amendments to the partnership agreement. Limited partners generally
have first right to a minimum quarterly distribution prior to distributions to
the convertible subordinated unit holders or the general partner (including
incentive distributions) and typically have arrearage rights if the minimum
quarterly distribution is not met. Most MLPs generally operate in the energy
natural resources or real estate sector and are subject to the risks generally
applicable to companies in those sectors. Those risks include, but are not
limited to, commodity pricing risk, supply and demand risk, depletion risk and
exploration risk. MLPs are also subject to the risk that authorities could
challenge the tax treatment of MLPs for federal income tax purposes which could
have a negative impact on the after-tax income available for distribution by the
MLPs and/or the value of your trust's investments.

DERIVATIVES RISK. Certain funds held by your trust may engage in
transactions in derivatives. Derivatives are subject to counterparty risk which
is the risk that the other party in a transaction may be unable or unwilling to
meet obligations when due. Use of derivatives may increase volatility of a fund
and the trust and reduce returns. Fluctuations in the value of derivatives may
not correspond with fluctuations of underlying exposures. Unanticipated market
movements could result in significant losses on derivative positions including
greater losses than amounts originally invested and potentially unlimited losses
in the case of certain derivatives. There are no assurances that there will be
a secondary market available in any derivative position which could result in
illiquidity and the inability of a fund to

Understanding Your Investment 31

liquidate or terminate positions as valued. Valuation of derivative positions
may be difficult and increase during times of market turmoil. Certain
derivatives may be used as a hedge against other securities positions however
hedging can be subject to the risk of imperfect alignment and there are no
assurances that a hedge will be achieved as intended which can pose significant
loss to a fund and your trust. Recent legislation has called for significant
increases to the regulation of the derivatives market. Regulatory changes and
rulemaking is ongoing and the full impact may not be known for some time. This
increased regulation may make derivatives more costly, limit the availability of
derivatives or otherwise adversely affect the value or performance of
derivatives. Examples of increased regulation include, but are not limited to
the imposition of clearing and reporting requirements on transactions that fall
within the definition of "swap" and "security-based swap", increased
recordkeeping and reporting requirements, changing definitional and registration
requirements, and changes to the way that funds' use of derivatives is
regulated. We cannot predict the effects of any new governmental regulation
that may be implemented on the ability of a fund to use any financial derivative
product, and there can be no assurance that any new governmental regulation will
not adversely affect a fund's ability to achieve its investment objective. The
federal income tax treatment of a derivative may not be as favorable as a direct
investment in the asset that a derivative provides exposure to which may
adversely impact the timing, character and amount of income a fund realizes from
its investment. The tax treatment of certain derivatives is unsettled and may
be subject to future legislation, regulation or administrative pronouncements.

SWAPS. Certain funds held by your trust may invest in swaps. In addition to
general risks associated with derivatives described above, swap agreements
involve the risk that the party with whom a fund has entered into the swap will
default on its obligation to pay a fund and the risk that a fund will not be
able to meet its obligations to pay the other party to the agreement. Swaps
entered into by a fund may include, but are not limited to, interest rate swaps,
total return swaps and/or credit default swaps. In an interest rate swap
transaction, two parties exchange rights to receive interest payments, such as
exchanging the right to receive floating rate payments based on a reference
interest rate for the right to receive fixed rate payments. In addition to the
general risks associated with derivatives and swaps described above, interest
rate swaps are subject to interest rate risk and credit risk. In a total return
swap transaction, one party agrees to pay another party an amount equal to the
total return on a reference asset during a specified period of time in return
for periodic payments based on a fixed or variable interest rate or on the total
return from a different reference asset. In addition to the general risks
associated with derivatives and swaps described above, total return swaps could
result in losses if the reference asset does not perform as anticipated and
these swaps can have the potential for unlimited losses. In a credit default
swap transaction, one party makes one or more payments over the term of the
contract to the counterparty, provided that no event of default with respect to
a specific obligation or issuer has occurred. In return, upon any event of
default, such party would receive from the counterparty a payment equal to the
par (or other agreed-upon) value of such specified obligation. In addition to
general risks associated with derivatives and swaps described above, credit
default swaps involve special risks because they are difficult to value, are
highly susceptible to liquidity and credit risk, and generally pay a return to
the party that has paid the premium only in the event of an actual

32 Understanding Your Investment

default by the issuer of the underlying obligation (as opposed to a credit
downgrade or other indication of financial difficulty).

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. Certain funds held by your
trust may may engage in forward foreign currency exchange transactions. Forward
foreign exchange transactions are contracts to purchase or sell a specified
amount of a specified currency or multinational currency unit at a price and
future date set at the time of the contract. Forward foreign currency exchange
contracts do not eliminate fluctuations in the value of non-U.S. securities but
rather allow a fund to establish a fixed rate of exchange for a future point in
time. This strategy can have the effect of reducing returns and minimizing
opportunities for gain.

INDEXED AND INVERSE SECURITIES. Certain funds held by your trust may invest
in indexed and inverse securities. In addition to general risks associated with
derivatives described above, indexed and inverse securities are subject to risk
with respect to the value of the particular index. These securities are subject
to leverage risk and correlation risk. Certain indexed and inverse securities
have greater sensitivity to changes in interest rates or index levels than other
securities, and a fund's investment in such instruments may decline
significantly in value if interest rates or index levels move in a way a fund's
management does not anticipate.

FUTURES. Certain funds held by your trust may engage in futures
transactions. In addition to general risks associated with derivatives
described above, the primary risks associated with the use of futures contracts
and options are (a) the imperfect correlation between the change in market value
of the instruments held by a fund and the price of the futures contract or
option; (b) possible lack of a liquid secondary market for a futures contract
and the resulting inability to close a futures contract when desired; (c) losses
caused by unanticipated market movements, which are potentially unlimited; (d)
the investment adviser's inability to predict correctly the direction of
securities prices, interest rates, currency exchange rates and other economic
factors; and (e) the possibility that the counterparty will default in the
performance of its obligations. While futures contracts are generally liquid
instruments, under certain market conditions they may become illiquid. Futures
exchanges may impose daily or intra-day price change limits and/or limit the
volume of trading. Additionally, government regulation may further reduce
liquidity through similar trading restrictions.

OPTIONS. Certain funds held by your trust may engage in options
transactions. In addition to general risks associated with derivatives
described above, options are considered speculative. When a fund purchases an
option, it may lose the premium paid for it if the price of the underlying
security or other assets decreased or remained the same (in the case of a call
option) or increased or remained the same (in the case of a put option). If a
put or call option purchased by a fund were permitted to expire without being
sold or exercised, its premium would represent a loss to a fund. To the extent
that a fund writes or sells an option, if the decline or increase in the
underlying asset is significantly below or above the exercise price of the
written option, a fund could experience substantial and potentially unlimited
losses.

REPURCHASE AGREEMENT RISK. If the other party to a repurchase agreement
defaults on its obligation under such agreement, a fund may suffer delays and
incur costs or lose money in exercising its rights under the agreement. If the
seller fails to repurchase the security under a repurchase agreement and the
market value of such security declines, such fund may lose money.

Understanding Your Investment 33

SHORT SALES RISK. Certain funds held by your trust may engage in short
sales. Because making short sales in securities that it does not own exposes a
fund to the risks associated with those securities, such short sales involve
speculative exposure risk. A fund will incur a loss as a result of a short sale
if the price of the security increases between the date of the short sale and
the date on which such fund replaces the security sold short. A fund will
realize a gain if the security declines in price between those dates. As a
result, if a fund makes short sales in securities that increase in value, it
will likely underperform similar funds that do not make short sales in
securities they do not own. There can be no assurance that a fund will be able
to close out a short sale position at any particular time or at an acceptable
price. Although a fund's gain is limited to the amount at which it sold a
security short, its potential loss is limited only by the maximum attainable
price of the security, less the price at which the security was sold. Short
sale transactions involve leverage because they can provide investment exposure
in an amount exceeding the initial investment. A fund may also pay transaction
costs and borrowing fees in connection with short sales.

COMMODITIES. Certain funds held by your trust may have exposure to the
commodities market. This exposure could expose such funds and the trust to
greater volatility than investment in other securities. The value of
investments providing commodity exposure may be affected by changes in overall
market movements, commodity index volatility, changes in interest rates, or
factors affecting a particular industry or commodity, such as drought, floods,
weather, embargoes, tariffs and international economic, political and regulatory
developments.

MONEY MARKET SECURITIES. Certain funds held by your trust may invest in
money market securities. If market conditions improve while a fund has
temporarily invested some or all of its assets in high quality money market
securities, this strategy could result in reducing the potential gain from the
market upswing, thus reducing a fund's opportunity to achieve its investment
objective.

LEGISLATION/LITIGATION. From time to time, various legislative initiatives
are proposed in the United States and abroad which may have a negative impact on
certain of the securities held by your trust or underlying funds. In addition,
litigation regarding any of the issuers of the securities or of the industries
represented by these issuers may negatively impact the share prices of these
securities. No one can predict what impact any pending or threatened litigation
will have on the share prices of the securities.

NO FDIC GUARANTEE. An investment in your trust is not a deposit of any bank
and is not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.

CLOSED-END FUNDS

Closed-end funds are a type of investment company that holds an actively
managed portfolio of securities. Closed-end funds issue shares in "closed-end"
offerings which generally trade on a stock exchange (although some closed-end
fund shares are not listed on a securities exchange). Since closed-end funds
maintain a relatively fixed pool of investment capital, portfolio managers may
be better able to adhere to their investment philosophies through greater
flexibility and control. In addition, closed-end funds do not have to manage
fund liquidity to meet potentially large redemptions.

Closed-end funds are subject to various risks, including management's ability
to meet the closed-end fund's investment objective, and to

34 Understanding Your Investment

manage the closed-end fund portfolio when the underlying securities are redeemed
or sold, during periods of market turmoil and as investors' perceptions
regarding closed-end funds or their underlying investments change.

Shares of closed-end funds frequently trade at a discount from their net
asset value in the secondary market. This risk is separate and distinct from
the risk that the net asset value of closed-end fund shares may decrease. The
amount of such discount from net asset value is subject to change from time to
time in response to various factors.

Certain of the closed-end funds included in your trust may employ the use of
leverage in their portfolios through the issuance of preferred stock. While
leverage often serves to increase the yield of a closed-end fund, this leverage
also subjects the closed-end fund to increased risks. These risks may include
the likelihood of increased volatility and the possibility that the closed-end
fund's common share income will fall if the dividend rate on the preferred
shares or the interest rate on any borrowings rises. The use of leverage may
cause a closed-end fund to liquidate portfolio positions when it may not be
advantageous to do so to satisfy its obligations or to meet any required asset
segregation requirements.

Certain closed-end funds held by your trust may engage in borrowing.
Borrowing may exaggerate changes in the net asset value of a fund's shares and
in the return on a fund's portfolio. Borrowing will cost a fund interest
expense and other fees. The costs of borrowing may reduce a fund's return.
Borrowing may cause a fund to liquidate positions when it may not be
advantageous to do so to satisfy its obligations.

Certain closed-end funds held by your trust may engage in securities
lending. Securities lending involves the risk that the borrower may fail to
return the securities in a timely manner or at all. As a result, a fund could
lose money and there may be a delay in recovering the loaned securities. A fund
could also lose money if it does not recover the securities and/or the value of
the collateral falls, including the value of investments made with cash
collateral. These events could trigger adverse tax consequences for a fund.

Only the trustee may vote the shares of the closed-end funds held in your
trust. The trustee will vote the shares in the same general proportion as
shares held by other shareholders of each fund. Your trust may be required,
however, to reject any offer for securities or other property in exchange for
portfolio securities as described under "How the Trust Works--Changing Your
Portfolio."

HOW THE TRUST WORKS

YOUR TRUST. Your trust is a unit investment trust registered under the
Investment Company Act of 1940. We created your trust under a trust agreement
between Advisors Asset Management, Inc. (as depositor/sponsor, evaluator and
supervisor) and The Bank of New York Mellon (as trustee). To create your trust,
we deposited securities with the trustee (or contracts to purchase securities
along with an irrevocable letter of credit or other consideration to pay for the
securities). In exchange, the trustee delivered units of your trust to us.
Each unit represents an undivided interest in the assets of your trust. These
units remain outstanding until redeemed or until your trust terminates. At the
close of the New York Stock Exchange on your trust's inception date, the number
of units may be adjusted so that the public offering price per unit equals $10.
The number of units and fractional interest of each unit in your trust will
increase or decrease to the extent of any adjustment.

Understanding Your Investment 35

CHANGING YOUR PORTFOLIO. Your trust is not a managed fund. Unlike a managed
fund, we designed your portfolio to remain relatively fixed. Your trust will
generally buy and sell securities:

* to pay expenses,

* to issue additional units or redeem units,

* to take actions in response to certain corporate actions and other events
impacting portfolio securities,

* in limited circumstances to protect the trust,

* to make required distributions or avoid imposition of taxes on the trust,
or

* as permitted by the trust agreement.

When your trust sells securities, the composition and diversification of the
securities in the portfolio may be altered. If a public tender offer has been
made for a security or a merger, acquisition or similar transaction has been
announced affecting a security, the sponsor may direct the trustee to sell the
security or accept a tender offer if the supervisor determines that the action
is in the best interest of unitholders. The trustee will distribute any
available cash proceeds to unitholders.

If an offer by the issuer of any of the portfolio securities or any other
party is made to issue new securities, or to exchange securities, for trust
portfolio securities, the trustee will reject the offer unless your trust is a
"regulated investment company" for tax purposes. If your trust is a "regulated
investment company" for tax purposes and an offer by the issuer of any of the
portfolio securities or any other party is made to issue new securities, or to
exchange securities, for trust portfolio securities, the trustee may either vote
for or against, or accept or reject, any offer for new or exchanged securities
or property in exchange for a trust portfolio security at the direction of the
sponsor.

If any issuance, exchange or substitution of new or exchanged securities or
property in exchange for a trust portfolio security occurs (regardless of any
action or rejection by a trust), any securities and/or property received will be
deposited into the trust and will be promptly sold by the trustee pursuant to
the sponsor's direction, unless the sponsor advises the trustee to keep such
securities or property.

If any contract for the purchase of securities fails, the sponsor will refund
the cash and sales fee attributable to the failed contract to unitholders on or
before the next distribution date unless substantially all of the moneys held to
cover the purchase are reinvested in substitute securities in accordance with
the trust agreement. If your trust is a "regulated investment company" for tax
purposes, the sponsor may direct the reinvestment of security sale proceeds if
the sale is the direct result of serious adverse credit factors which, in the
opinion of the supervisor, would make retention of the securities detrimental to
the trust. In such a case, the sponsor may, but is not obligated to, direct the
reinvestment of sale proceeds in any other securities that meet the criteria for
inclusion in the trust on the trust's inception date. The sponsor may also
instruct the trustee to take action necessary to ensure that a portfolio
continues to satisfy the qualifications of a "regulated investment company" for
tax purposes. Your trust will not participate in rights offerings of closed-end
funds, if any.

We will increase the size of your trust as we sell units. When we create
additional units, we will seek to replicate the existing portfolio to the extent
practicable. When your trust buys securities, it may pay brokerage or other
acquisition fees. You could experience a dilution of your

36 Understanding Your Investment

investment because of these fees and fluctuations in security prices between the
time we create units and the time your trust buys the securities. When your
trust buys or sells securities, we may direct that it place orders with and pay
brokerage commissions to brokers that sell units or are affiliated with us, your
trust or the trustee.

Pursuant to an exemptive order, your trust may be able to purchase securities
from other trusts that we sponsor when we create additional units. Your trust
may also be able to sell securities to other trusts that we sponsor to satisfy
unit redemption, pay deferred sales charges or expenses, in connection with
periodic tax compliance or in connection with the termination of your trust.
The exemption may enable each trust to eliminate commission costs on these
transactions. The price for those securities will be the closing price on the
sale date on the exchange where the securities are principally traded as
certified by us to the trustee.

AMENDING THE TRUST AGREEMENT. The sponsor and the trustee can change the
trust agreement without your consent to correct any provision that may be
defective or to make other provisions that will not materially adversely affect
your interest (as determined by the sponsor and the trustee). We cannot change
this agreement to reduce your interest in your trust without your consent.
Investors owning two-thirds of the units in your trust may vote to change this
agreement.

TERMINATION OF YOUR TRUST. Your trust will terminate on the termination date
set forth under "Essential Information" in the "Investment Summary" section of
this prospectus for your trust. The trustee may terminate your trust early if
the value of the trust is less than 40% of the original value of the securities
in your trust at the time of deposit. At this size, the expenses of your trust
may create an undue burden on your investment. Investors owning two-thirds of
the units in your trust may also vote to terminate the trust early. The trustee
will liquidate your trust in the event that a sufficient number of units not yet
sold to the public are tendered for redemption so that the net worth of your
trust would be reduced to less than 40% of the value of the securities at the
time they were deposited in the trust. If this happens, we will refund any
sales charge that you paid.

The trustee will notify you of any termination and sell any remaining
securities. The trustee will send your final distribution to you within a
reasonable time following liquidation of all the securities after deducting
final expenses. Your termination distribution may be less than the price you
originally paid for your units.

THE SPONSOR. The sponsor of your trust is Advisors Asset Management, Inc.
We are a broker-dealer specializing in providing trading and support services to
broker-dealers, registered representatives, investment advisers and other
financial professionals. Our headquarters are located at 18925 Base Camp Road,
Monument, Colorado 80132. You can contact our unit investment trust division at
8100 East 22nd Street North, Building 800, Suite 102, Wichita, Kansas 67226 or
by using the contacts listed on the back cover of this prospectus. AAM is a
registered broker-dealer and investment adviser, a member of the Financial
Industry Regulatory Authority, Inc. (FINRA) and Securities Investor Protection
Corporation (SIPC) and a registrant of the Municipal Securities Rulemaking Board
(MSRB). If we fail to or cannot perform our duties as sponsor or become
bankrupt, the trustee may replace us, continue to operate your trust without a
sponsor, or terminate your trust.

We and your trust have adopted a code of ethics requiring our employees who
have access to

Understanding Your Investment 37

information on trust transactions to report personal securities transactions.
The purpose of the code is to avoid potential conflicts of interest and to
prevent fraud, deception or misconduct with respect to your trust.

The sponsor or an affiliate may use the list of securities in your trust in
its independent capacity (which may include acting as an investment adviser or
broker-dealer) and distribute this information to various individuals and
entities. The sponsor or an affiliate may recommend or effect transactions in
the securities. This may also have an impact on the price your trust pays for
the securities and the price received upon unit redemption or trust termination.
The sponsor may act as agent or principal in connection with the purchase and
sale of securities, including those held by your trust, and may act as a
specialist market maker in the securities. The sponsor may also issue reports
and make recommendations on the securities in your trust. The sponsor or an
affiliate may have participated in a public offering of one or more of the
securities in your trust. The sponsor, an affiliate or their employees may have
a long or short position in these securities or related securities. An officer,
director or employee of the sponsor or an affiliate may be an officer or
director for the issuers of the securities.

THE TRUSTEE. The Bank of New York Mellon is the trustee of your trust with
its principal unit investment trust division offices located at 2 Hanson Place,
12th Floor, Brooklyn, New York 11217. You can contact the trustee by calling
the telephone number on the back cover of this prospectus or by writing to its
unit investment trust office. We may remove and replace the trustee in some
cases without your consent. The trustee may also resign by notifying us and
investors.

HOW WE DISTRIBUTE UNITS. We sell units to the public through broker-dealers
and other firms. These distribution firms each pay part of the sales fee when
they sell units. During the initial offering period, the broker-dealer
concession or agency commission for broker-dealers and other firms is as
follows:

TRANSACTION CONCESSION OR
AMOUNT: AGENCY COMMISSION:
------------------------------------------

Less than $50,000 3.10%
$50,000 - $99,999 2.85
$100,000 - $249,999 2.60
$250,000 - $499,999 2.30
$500,000 - $999,999 2.20
$1,000,000 or more 1.75

We apply these concessions or agency commissions as a percent of the public
offering price per unit at the time of the transaction. The broker-dealer
concession or agency commission is 65% of the sales fee for secondary market
sales. For transactions involving unitholders of other unit investment trusts
who use their redemption or termination proceeds to purchase units of your
trust, the broker-dealer concession or agency commission is 2.15% of the public
offering price per unit. No broker-dealer concession or agency commission is
paid to broker-dealers, investment advisers or other selling firms in connection
with unit sales in Fee Accounts subject to a Wrap Fee.

Broker-dealers and other firms that sell units of certain unit investment
trusts for which AAM acts as sponsor are eligible to receive additional
compensation for volume sales. The sponsor offers two separate volume
concession structures for certain trusts that are referred to as "Volume
Concession A" and "Volume Concession B." The trusts offered in this prospectus
are Volume Concession A trusts. Broker-dealers and other firms that sell units
of any Volume Concession A trust are eligible

38 Understanding Your Investment

to receive the additional compensation described below. Such payments will be
in addition to the regular concessions paid to firms as set forth in the
applicable trust's prospectus. The additional concession is based on total
initial offering period sales of all Volume Concession A trusts during a
calendar quarter as set forth in the following table:

INITIAL OFFERING PERIOD SALES VOLUME
DURING CALENDAR QUARTER CONCESSION
---------------------------------------------------------

Less than $10,000,000 0.000%
$10,000,000 but less than $25,000,000 0.050
$25,000,000 but less than $50,000,000 0.100
$50,000,000 but less than $75,000,000 0.110
$75,000,000 but less than $100,000,000 0.120
$100,000,000 but less than $250,000,000 0.125
$250,000,000 but less than $500,000,000 0.135
$500,000,000 or more 0.150

This volume concession will be paid on units of all Volume Concession A
trusts sold in the initial offering period, except as described below. For a
trust to be eligible for this additional Volume Concession A compensation for
calendar quarter sales, the trust's prospectus must include disclosure related
to this additional Volume Concession A compensation; a trust is not eligible for
this additional Volume Concession A compensation if the prospectus for such
trust does not include disclosure related to this additional Volume Concession A
compensation. Broker-dealer firms will not receive additional compensation
unless they sell at least $10.0 million of units of Volume Concession A trusts
during a calendar quarter. For example, if a firm sells $9.5 million of units
of Volume Concession A trusts in the initial offering period during a calendar
quarter, the firm will not receive any additional compensation with respect to
such trusts. Once a firm reaches a particular breakpoint during a quarter, the
firm will receive the stated volume concession on all initial offering period
sales of Volume Concession A trusts during the applicable quarter. For example,
if a firm sells $12.5 million of units of Volume Concession A trusts in the
initial offering period during a calendar quarter, the firm will receive
additional compensation of 0.05% of $12.5 million and if a firm sells $27.0
million of units of Volume Concession A trusts in the initial offering period
during a calendar quarter, the firm will receive additional compensation of
0.100% of $27.0 million.

In addition, dealer firms will not receive volume concessions on the sale of
units which are not subject to a transactional sales charge. However, such
sales will be included in determining whether a firm has met the sales level
breakpoints for volume concessions subject to the policies of the related
selling firm. Secondary market sales of all unit trusts are excluded for
purposes of these volume concessions. We will pay these amounts out of our own
assets within a reasonable time following each calendar quarter.

Any sales fee discount is borne by the broker-dealer or selling firm out of
the broker-dealer concession or agency commission. We reserve the right to
change the amount of concessions or agency commissions from time to time.

We currently may provide, at our own expense and out of our own profits,
additional compensation and benefits to broker-dealers who sell units of your
trust and our other products. This compensation is intended to result in
additional sales of our products and/or compensate broker-dealers and financial
advisors for past sales. A number of factors are considered in determining
whether to pay these additional amounts. Such factors may include, but are not
limited to, the level or type of services provided by the intermediary, the
level or expected level of sales of our products by the intermediary or its
agents, the placing of our products on a preferred

Understanding Your Investment 39

or recommended product list and access to an intermediary's personnel. We may
make these payments for marketing, promotional or related expenses, including,
but not limited to, expenses of entertaining retail customers and financial
advisors, advertising, sponsorship of events or seminars, obtaining information
about the breakdown of unit sales among an intermediary's representatives or
offices, obtaining shelf space in broker-dealer firms and similar activities
designed to promote the sale of our products. We make such payments to a
substantial majority of intermediaries that sell our products. We may also make
certain payments to, or on behalf of, intermediaries to defray a portion of
their costs incurred for the purpose of facilitating unit sales, such as the
costs of developing or purchasing trading systems to process unit trades.
Payments of such additional compensation described in this paragraph and the
volume concessions described above, some of which may be characterized as
"revenue sharing," may create an incentive for financial intermediaries and
their agents to sell or recommend our products, including your trust, over other
products. These arrangements will not change the price you pay for your units.

We generally register units for sale in various states in the U.S. We do not
register units for sale in any foreign country. This prospectus does not
constitute an offer of units in any state or country where units cannot be
offered or sold lawfully. We may reject any order for units in whole or in
part.

We may gain or lose money when we hold units in the primary or secondary
market due to fluctuations in unit prices. The gain or loss is equal to the
difference between the price we pay for units and the price at which we sell or
redeem them. We may also gain or lose money when we deposit securities to
create units. The amount of our profit or loss on the initial deposit of
securities into your trust is shown in the "Notes to Portfolio" section for your
trust.

TAXES--REGULATED INVESTMENT COMPANIES

This section summarizes some of the main U.S. federal income tax consequences
of owning units of your trust if your trust intends to qualify as a "regulated
investment company" under federal tax laws. This section is current as of the
date of this prospectus. Tax laws and interpretations change frequently, and
these summaries do not describe all of the tax consequences to all taxpayers.
For example, these summaries generally do not describe your situation if you are
a corporation, a non-U.S. person, a broker/dealer, or other investor with
special circumstances. In addition, this section does not describe your state,
local or foreign tax consequences.

This federal income tax summary is based in part on the advice of counsel to
the sponsor. The Internal Revenue Service could disagree with any conclusions
set forth in this section. In addition, our counsel was not asked to review,
and has not reached a conclusion with respect to the federal income tax
treatment of the assets to be deposited in your trust. This may not be
sufficient for you to use for the purpose of avoiding penalties under federal
tax law.

As with any investment, you should seek advice based on your individual
circumstances from your own tax advisor.

TRUST STATUS. Your trust intends to qualify as a "regulated investment
company" under the federal tax laws. If your trust qualifies as a regulated
investment company and distributes its income as required by the tax law, your
trust generally will not pay federal income taxes. An adverse

40 Understanding Your Investment

federal income tax audit of a partnership that the trust invests in could result
in the trust being required to pay federal income tax or pay a deficiency
dividend (without having received additional cash).

DISTRIBUTIONS. Trust distributions are generally taxable. After the end of
each year, you will receive a tax statement that separates your trust's
distributions into three categories, ordinary income distributions, capital gain
dividends and return of capital. Ordinary income distributions are generally
taxed at your ordinary tax rate, however, as further discussed below, certain
ordinary income distributions received from your trust may be taxed at the
capital gains tax rates. Generally, you will treat all capital gain dividends
as long-term capital gains regardless of how long you have owned your units. To
determine your actual tax liability for your capital gain dividends, you must
calculate your total net capital gain or loss for the tax year after considering
all of your other taxable transactions, as described below. In addition, your
trust may make distributions that represent a return of capital for tax purposes
and thus will generally not be taxable to you. A return of capital, although
not initially taxable to you, will result in a reduction in the basis in your
units and subsequently result in higher levels of taxable capital gains in the
future. In addition, if the non-dividend distribution exceeds your basis in
your units, you will have long-term or short-term gain depending upon your
holding period. The tax status of your distributions from your trust is not
affected by whether you reinvest your distributions in additional units or
receive them in cash. The income from your trust that you must take into
account for federal income tax purposes is not reduced by amounts used to pay a
deferred sales fee, if any. The tax laws may require you to treat distributions
made to you in January as if you had received them on December 31 of the
previous year. Income from your trust may also be subject to a 3.8 percent
"medicare tax". This tax generally applies to your net investment income if
your adjusted gross income exceeds certain threshold amounts, which are $250,000
in the case of married couples filing joint returns and $200,000 in the case of
single individuals.

DIVIDENDS RECEIVED DEDUCTION. A corporation that owns units generally will
not be entitled to the dividends received deduction with respect to many
dividends received from your trust because the dividends received deduction is
generally not available for distributions from regulated investment companies.
However, certain ordinary income dividends on units that are attributable to
qualifying dividends received by your trust from certain corporations may be
reported by the trust as being eligible for the dividends received deduction.

SALE OR REDEMPTION OF UNITS. If you sell or redeem your units, you will
generally recognize a taxable gain or loss. To determine the amount of this
gain or loss, you must subtract your tax basis in your units from the amount you
receive in the transaction. Your tax basis in your units is generally equal to
the cost of your units, generally including sales charges. In some cases,
however, you may have to adjust your tax basis after you purchase your units.

CAPITAL GAINS AND LOSSES AND CERTAIN ORDINARY INCOME DIVIDENDS. If you are
an individual, the maximum marginal stated federal tax rate for net capital gain
is generally 20% for taxpayers in the 39.6% tax bracket, 15% for taxpayers in
the 25%, 28%, 33% and 35% tax brackets and 0% for taxpayers in the 10% and 15%
tax brackets. Some portion of your capital gain dividends may be subject to
higher maximum marginal stated federal

Understanding Your Investment 41

income tax rates. Capital gains may also be subject to the "medicare tax"
described above. Capital gain received from assets held for more than one year
that is considered "unrecaptured section 1250 gain" (which may be the case, for
example, with some capital gains attributable to equity interests in real estate
investment trusts that constitute interests in entities treated as real estate
investment trusts for federal income tax purposes) is taxed at a maximum stated
tax rate of 25%. In the case of capital gain dividends, the determination of
which portion of the capital gain dividend, if any, is subject to the 25% tax
rate, will be made based on rules prescribed by the United States Treasury.

Net capital gain equals net long-term capital gain minus net short-term
capital loss for the taxable year. Capital gain or loss is long-term if the
holding period for the asset is more than one year and is short-term if the
holding period for the asset is one year or less. You must exclude the date you
purchase your units to determine your holding period. However, if you receive a
capital gain dividend from your trust and sell your unit at a loss after holding
it for six months or less, the loss will be recharacterized as long-term capital
loss to the extent of the capital gain dividend received. The tax rates for
capital gains realized from assets held for one year or less are generally the
same as for ordinary income. The Internal Revenue Code treats certain capital
gains as ordinary income in special situations.

Ordinary income dividends received by an individual unitholder from a
regulated investment company such as your trust are generally taxed at the same
rates that apply to net capital gain (as discussed above), provided certain
holding period requirements are satisfied and provided the dividends are
attributable to qualifying dividends received by your trust itself.
Distributions with respect to shares in real estate investment trusts are
qualifying dividends only in limited circumstances. Your trust will provide
notice to its unitholders of the amount of any distribution which may be taken
into account as a dividend which is eligible for the capital gains tax rates.

IN-KIND DISTRIBUTIONS. Under certain circumstances, as described in this
prospectus, you may receive an in-kind distribution of trust securities when you
redeem units or when your trust terminates. This distribution will be treated
as a sale for federal income tax purposes and you will generally recognize gain
or loss, generally based on the value at that time of the securities and the
amount of cash received. The Internal Revenue Service could however assert that
a loss could not be currently deducted.

EXCHANGES. If you elect to have your proceeds from your trust rolled over
into a future trust, the exchange would generally be considered a sale for
federal income tax purposes.

DEDUCTIBILITY OF TRUST EXPENSES. Expenses incurred and deducted by your
trust will generally not be treated as income taxable to you. In some cases,
however, you may be required to treat your portion of these trust expenses as
income. In these cases you may be able to take a deduction for these expenses.
However, certain miscellaneous itemized deductions, such as investment expenses,
may be deducted by individuals only to the extent that all of these deductions
exceed 2% of the individual's adjusted gross income. Some individuals may also
be subject to further limitations on the amount of their itemized deductions,
depending on their income.

FOREIGN TAX CREDIT. If your trust invests in any foreign securities, the tax
statement that you receive may include an item showing foreign taxes your trust
paid to other countries. In this case,

42 Understanding Your Investment

dividends taxed to you will include your share of the taxes your trust paid to
other countries. You may be able to deduct or receive a tax credit for your
share of these taxes.

INVESTMENTS IN CERTAIN FOREIGN CORPORATIONS. If your trust holds an equity
interest in any "passive foreign investment companies" ("PFICs"), which are
generally certain foreign corporations that receive at least 75% of their annual
gross income from passive sources (such as interest, dividends, certain rents
and royalties or capital gains) or that hold at least 50% of their assets in
investments producing such passive income, the trust could be subject to U.S.
federal income tax and additional interest charges on gains and certain
distributions with respect to those equity interests, even if all the income or
gain is timely distributed to its unitholders. Your trust will not be able to
pass through to its unitholders any credit or deduction for such taxes. Your
trust may be able to make an election that could ameliorate these adverse tax
consequences. In this case, your trust would recognize as ordinary income any
increase in the value of such PFIC shares, and as ordinary loss any decrease in
such value to the extent it did not exceed prior increases included in income.
Under this election, your trust might be required to recognize in a year income
in excess of its distributions from PFICs and its proceeds from dispositions of
PFIC stock during that year, and such income would nevertheless be subject to
the distribution requirement and would be taken into account for purposes of the
4% excise tax. Dividends paid by PFICs are not treated as qualified dividend
income.

FOREIGN INVESTORS. If you are a foreign investor (i.e., an investor other
than a U.S. citizen or resident or a U.S. corporation, partnership, estate or
trust), you should be aware that, generally, subject to applicable tax treaties,
distributions from your trust will be characterized as dividends for federal
income tax purposes (other than dividends which your trust properly reports as
capital gain dividends) and will be subject to U.S. income taxes, including
withholding taxes, subject to certain exceptions described below. However,
distributions received by a foreign investor from your trust that are properly
reported by your trust as capital gain dividends may not be subject to U.S.
federal income taxes, including withholding taxes, provided that your trust
makes certain elections and certain other conditions are met. In addition,
distributions in respect of units may be subject to a U.S. withholding tax of
30% in the case of distributions to (i) certain non-U.S. financial institutions
that have not entered into an agreement with the U.S. Treasury to collect and
disclose certain information and are not resident in a jurisdiction that has
entered into such an agreement with the U.S. Treasury and (ii) certain other
non-U.S. entities that do not provide certain certifications and information
about the entity's U.S. owners. Dispositions of units by such persons may be
subject to such withholding after December 31, 2018. You should also consult
your tax advisor with respect to other U.S. tax withholding and reporting
requirements.

EXPENSES

Your trust will pay various expenses to conduct its operations. The "Fees
and Expenses" section for each trust in this prospectus shows the estimated
amount of these expenses.

The sponsor will receive a fee from your trust for creating and developing
the trust, including determining the trust's objectives, policies, composition
and size, selecting service providers and information services and for providing
other similar administrative and ministerial

Understanding Your Investment 43

functions. This "creation and development fee" is a charge of $0.05 per unit.
The trustee will deduct this amount from your trust's assets as of the close of
the initial offering period. No portion of this fee is applied to the payment
of distribution expenses or as compensation for sales efforts. This fee will
not be deducted from proceeds received upon a repurchase, redemption or exchange
of units before the close of the initial public offering period.

Your trust will pay a fee to the trustee for its services. The trustee also
benefits when it holds cash for your trust in non-interest bearing accounts.
Your trust will reimburse us as supervisor, evaluator and sponsor for providing
portfolio supervisory services, for evaluating your portfolio and for providing
bookkeeping and administrative services. Our reimbursements may exceed the
costs of the services we provide to your trust but will not exceed the costs of
services provided to all of our unit investment trusts in any calendar year.
All of these fees may adjust for inflation without your approval.

Your trust will also pay its general operating expenses. Your trust may pay
expenses such as trustee expenses (including legal and auditing expenses),
various governmental charges, fees for extraordinary trustee services, costs of
taking action to protect your trust, costs of indemnifying the trustee and the
sponsor, legal fees and expenses, expenses incurred in contacting you and costs
incurred to reimburse the trustee for advancing funds to meet distributions.
Your trust may pay the costs of updating its registration statement each year.
The trustee will generally pay trust expenses from distributions received on the
securities but in some cases may sell securities to pay trust expenses.

EXPERTS

LEGAL MATTERS. Chapman and Cutler LLP acts as counsel for your trust and has
given an opinion that the units are validly issued. Dorsey & Whitney LLP acts
as counsel for the trustee.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. Grant Thornton LLP,
independent registered public accounting firm, audited the statements of
financial condition and the portfolios included in this prospectus.

ADDITIONAL INFORMATION

This prospectus does not contain all the information in the registration
statement that your trust filed with the Securities and Exchange Commission.
The Information Supplement, which was filed with the Securities and Exchange
Commission, includes more detailed information about the securities in your
portfolio, investment risks and general information about your trust. You can
obtain the Information Supplement by contacting us or the Securities and
Exchange Commission as indicated on the back cover of this prospectus. This
prospectus incorporates the Information Supplement by reference (it is legally
considered part of this prospectus).

44 Understanding Your Investment

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

UNITHOLDERS
ADVISORS DISCIPLINED TRUST 1656

We have audited the accompanying statement of financial condition, including the
trust portfolios on pages __, __, __, __, __ and __ of Advisors Disciplined
Trust 1656, as of ___________, 2016, the initial date of deposit. The
statements of financial condition are the responsibility of the trust's sponsor.
Our responsibility is to express an opinion on these statements of financial
condition based on our audits.

We conducted our audits in accordance with auditing standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the statements of financial condition are free of material misstatement. We
were not engaged to perform audits of the trusts' internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the trusts' internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statements of financial condition, assessing the accounting principles used
and significant estimates made by the sponsor, as well as evaluating the overall
financial statement presentation. Our procedures included confirmation with The
Bank of New York Mellon, trustee, of cash or an irrevocable letter of credit
deposited for the purchase of securities as shown in the statements of financial
condition as of ___________, 2016. We believe that our audits of the statements
of financial condition provides a reasonable basis for our opinion.

In our opinion, the statements of financial condition referred to above present
fairly, in all material respects, the financial position of Advisors Disciplined
Trust 1656 as of ___________, 2016, in conformity with accounting principles
generally accepted in the United States of America.

Chicago, Illinois GRANT THORNTON LLP
___________, 2016

ADVISORS DISCIPLINED TRUST 1656 GLOBAL COVERED CALL
& INCOME STRATEGIES INFLATION INCOME
STATEMENT OF FINANCIAL CONDITION AS OF ____________, 2016 CLOSED-END PORTFOLIO STRATEGY PORTFOLIO
--------------------------------------------------------------------------------------------------------------------------

INVESTMENT IN SECURITIES
Contracts to purchase underlying securities (1)(2) . . . . . . . . . . . $ $
---------- ----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ $
========== ==========

LIABILITIES AND INTEREST OF INVESTORS
Liabilities:
Organization costs (3) . . . . . . . . . . . . . . . . . . . . . . . . $ $
Deferred sales fee (4) . . . . . . . . . . . . . . . . . . . . . . . .
Creation and development fee (4) . . . . . . . . . . . . . . . . . . .
---------- ----------

---------- ----------

Interest of investors:
Cost to investors (5) . . . . . . . . . . . . . . . . . . . . . . . .
Less: initial sales fee (4)(5) . . . . . . . . . . . . . . . . . . . .
Less: deferred sales fee, creation and development fee
and organization costs (3)(4)(5) . . . . . . . . . . . . . . . .
---------- ----------
Net interest of investors . . . . . . . . . . . . . . . . . . . . . .
---------- ----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ $
========== ==========

Number of units . . . . . . . . . . . . . . . . . . . . . . . . . . . .
========== ==========

Net asset value per unit . . . . . . . . . . . . . . . . . . . . . . . . $ $
========== ==========

<FN>
(1) Aggregate cost of the securities is based on the closing sale price
evaluations as determined by the evaluator.
(2) Cash or an irrevocable letter of credit has been deposited with the trustee
covering the funds (aggregating $________ with $________ aggregated to each
trust) necessary for the purchase of securities in the trusts represented
by purchase contracts.
(3) A portion of the public offering price represents an amount sufficient to
pay for all or a portion of the costs incurred in establishing the trusts.
These costs have been estimated at $_____ per unit for each trust. A
distribution will be made as of the earlier of the close of the initial
offering period or six months following the trust's inception date to an
account maintained by the trustee from which this obligation of the
investors will be satisfied. To the extent the actual organization costs
are greater than the estimated amount, only the estimated organization
costs added to the public offering price will be reimbursed to the sponsor
and deducted from the assets of the trust.
(4) The total sales fee consists of an initial sales fee, a deferred sales fee
and a creation and development fee. The initial sales fee is equal to the
difference between the maximum sales fee and the sum of the remaining
deferred sales fee and the total creation and development fee. The maximum
sales fee is 3.95% of the public offering price per unit. The deferred
sales fee is equal to $0.245 per unit and the creation and development fee
is equal to $0.05 per unit.
(5) The aggregate cost to investors includes the applicable sales fee assuming
no reduction of sales fees.
</FN>

Understanding Your Investment 45

CONTENTS

INVESTMENT SUMMARY
-----------------------------------------------------------------------

A concise description 2 GLOBAL COVERED CALL &
of essential information INCOME STRATEGIES PORTFOLIO
about the portfolio
6 INFLATION INCOME
STRATEGY PORTFOLIO

UNDERSTANDING YOUR INVESTMENT
-----------------------------------------------------------------------

Detailed information to 12 How to Buy Units
help you understand 15 How to Sell Your Units
your investment 18 Distributions
19 Investment Risks
34 Closed-End Funds
35 How the Trust Works
40 Taxes-Regulated Investment
Companies
43 Expenses
44 Experts
44 Additional Information
45 Report of Independent Registered
Public Accounting Firm
45 Statement of Financial Condition

WHERE TO LEARN MORE
-----------------------------------------------------------------------

You can contact us for VISIT US ON THE INTERNET
free information about http://www.AAMlive.com
this and other investments, CALL ADVISORS ASSET
including the Information MANAGEMENT, INC.
Supplement (877) 858-1773
CALL THE BANK OF NEW YORK MELLON
(800) 848-6468

ADDITIONAL INFORMATION
-----------------------------------------------------------------------

This prospectus does not contain all information filed with the
Securities and Exchange Commission. To obtain or copy this
information including the Information Supplement (a duplication
fee may be required):

E-MAIL: publicinfo@sec.gov
WRITE: Public Reference Section
Washington, D.C. 20549
VISIT: http://www.sec.gov
(EDGAR Database)
CALL: 1-202-551-8090
(only for information on the operation of the
Public Reference Section)

REFER TO:
ADVISORS DISCIPLINED TRUST 1656
Securities Act file number: 333-__________
Investment Company Act file number: 811-21056

GLOBAL COVERED CALL & INCOME
STRATEGIES CLOSED-END
PORTFOLIO, SERIES 2016-2

INFLATION INCOME STRATEGY
PORTFOLIO, SERIES 2016-2

PROSPECTUS

___________, 2016

[LOGO]

AAM

ADVISORS
ASSET MANAGEMENT

ADVISORS DISCIPLINED TRUST 1656

GLOBAL COVERED CALL & INCOME STRATEGIES CLOSED-END PORTFOLIO, SERIES 2016-2

INFLATION INCOME STRATEGY PORTFOLIO, SERIES 2016-2

INFORMATION SUPPLEMENT

This Information Supplement provides additional information concerning
each trust described in the prospectus for the Advisors Disciplined Trust series
identified above. This Information Supplement should be read in conjunction
with the prospectus. It is not a prospectus. It does not include all of the
information that an investor should consider before investing in a trust. It
may not be used to offer or sell units of a trust without the prospectus. This
Information Supplement is incorporated into the prospectus by reference and has
been filed as part of the registration statement with the Securities and
Exchange Commission. Investors should obtain and read the prospectus prior to
purchasing units of a trust. You can obtain the prospectus without charge by
contacting your financial professional or by contacting the unit investment
trust division of Advisors Asset Management, Inc. at 18925 Base Camp Road, Suite
203, Monument, Colorado 80132, at 8100 East 22nd Street North, Building 800,
Suite 102, Wichita, Kansas 67226 or by calling (877) 858-1773. This Information
Supplement is dated as of the date of the prospectus.

CONTENTS

General Information 2
Investment Objective and Policies 3
Closed-End Funds 5
Risk Factors 5
Administration of the Trust 25
Portfolio Transactions and Brokerage Allocation 35
Purchase, Redemption and Pricing of Units 35
Performance Information 40

GENERAL INFORMATION

Each trust is one of a series of separate unit investment trusts created
under the name Advisors Disciplined Trust and registered under the Investment
Company Act of 1940. Each trust was created as a common law trust on the
inception date described in the prospectus under the laws of the state of
New York. Each trust was created under a trust agreement among Advisors Asset
Management, Inc. (as sponsor, evaluator and supervisor) and The Bank of New York
Mellon (as trustee).

When your trust was created, the sponsor delivered to the trustee
securities or contracts for the purchase thereof for deposit in the trust and
the trustee delivered to the sponsor documentation evidencing the ownership of
units of the trust. At the close of the New York Stock Exchange on the trust's
inception date, the number of units may be adjusted so that the public offering
price per unit equals $10. The number of units, fractional interest of each
unit in the trust and estimated interest distributions per unit will increase or
decrease to the extent of any adjustment. Additional units of each trust may be
issued from time to time by depositing in the trust additional securities (or
contracts for the purchase thereof together with cash or irrevocable letters of
credit) or cash (including a letter of credit or the equivalent) with
instructions to purchase additional securities. As additional units are issued
by a trust as a result of the deposit of additional securities by the sponsor,
the aggregate value of the securities in the trust will be increased and the
fractional undivided interest in the trust represented by each unit will be
decreased. The sponsor may continue to make additional deposits of securities
into a trust, provided that such additional deposits will be in amounts, which
will generally maintain the existing relationship among the shares of the
securities in such trust. Thus, although additional units will be issued, each
unit will generally continue to represent the same number of shares of each
security. If the sponsor deposits cash to purchase additional securities,
existing and new investors may experience a dilution of their investments and a
reduction in their anticipated income because of fluctuations in the prices of
the securities between the time of the deposit and the purchase of the
securities and because the trust will pay any associated brokerage fees.

The trustee has not participated in the selection of the securities
deposited in the trust and has no responsibility for the composition of the
trust portfolio.

Each unit initially offered represents an undivided interest in the related
trust. To the extent that any units are redeemed by the trustee or additional
units are issued as a result of additional securities being deposited by the
sponsor, the fractional undivided interest in a trust represented by each
unredeemed unit will increase or decrease accordingly, although the actual
interest in such trust represented by such fraction will remain unchanged.
Units will remain outstanding until redeemed upon tender to the trustee by
unitholders, which may include the sponsor, or until the termination of the
trust agreement.

A trust consists of (a) the securities listed under "Portfolio" in the
prospectus as may continue to be held from time to time in the trust, (b) any
additional securities acquired and held by the trust pursuant to the provisions
of the trust agreement and (c) any cash held in the accounts of the trust.
Neither the sponsor nor the trustee shall be liable in any way for any failure
in any of the securities. However, should any contract for the purchase of any
of the securities initially

-2-

deposited in a trust fail, the sponsor will, unless substantially all of the
moneys held in the trust to cover such purchase are reinvested in substitute
securities in accordance with the trust agreement, refund the cash and sales fee
attributable to such failed contract to all unitholders on the next distribution
date.

INVESTMENT OBJECTIVE AND POLICIES

The trust is a unit investment trust and is not an "actively managed" fund.
Traditional methods of investment management for a managed fund typically
involve frequent changes in a portfolio of securities on the basis of economic,
financial and market analysis. The portfolio of a trust, however, will not be
actively managed and therefore the adverse financial condition of an issuer will
not necessarily require the sale of its securities from a portfolio.

The sponsor may not alter the portfolio of a trust by the purchase, sale or
substitution of securities, except in special circumstances as provided in the
trust agreement. Thus, the assets of a trust will generally remain unchanged
under normal circumstances. The trust agreement provides that the sponsor may
(but need not) direct the trustee to dispose of a security in certain events
such as the issuer having defaulted on the payment on any of its outstanding
obligations or the price of a security has declined to such an extent or other
such credit factors exist so that in the opinion of the supervisor the retention
of such securities would be detrimental to the trust.

If a public tender offer has been made for a security or a merger,
acquisition or similar transaction has been announced affecting a security, the
trustee may either sell the security or accept a tender offer if the supervisor
determines that the action is in the best interest of unitholders. The trustee
will distribute any cash proceeds to unitholders. If an offer by the issuer of
any of the portfolio securities or any other party is made to issue new
securities, or to exchange securities, for trust portfolio securities, the
trustee will at the direction of the sponsor, vote for or against, or accept or
reject, any offer for new or exchanged securities or property in exchange for a
trust portfolio security. If any such issuance, exchange or substitution occurs
(regardless of any action or rejection by a trust), any securities and/or
property received will be deposited into the trust and will be promptly sold by
the trustee pursuant to the sponsor's direction, unless the sponsor advises the
trustee to keep such securities or property. If any contract for the purchase
of securities fails, the sponsor will refund the cash and sales fee attributable
to the failed contract to unitholders on or before the next distribution date
unless substantially all of the moneys held to cover the purchase are reinvested
in substitute securities in accordance with the trust agreement. The sponsor may
direct the reinvestment of security sale proceeds if the sale is the direct
result of serious adverse credit factors which, in the opinion of the sponsor,
would make retention of the securities detrimental to the trust. In such a case,
the sponsor may, but is not obligated to, direct the reinvestment of sale
proceeds in any other securities that meet the criteria for inclusion in the
trust on the trust's inception date. The sponsor may also instruct the trustee
to take action necessary to ensure that the portfolio continues to satisfy the
qualifications of a regulated investment company.

The trustee may sell securities, designated by the supervisor, from a trust
for the purpose of redeeming units of such trust tendered for redemption and the
payment of expenses.

-3-

In addition, if a trust has elected to be taxed as a regulated investment
company, the trustee may dispose of certain securities and take such further
action as may be needed from time to time to ensure that a trust continues to
satisfy the qualifications of a regulated investment company, including the
requirements with respect to diversification under Section 851 of the Internal
Revenue Code, and as may be needed from time to time to avoid the imposition of
any tax on a trust or undistributed income of a trust as a regulated investment
company.

Proceeds from the sale of securities (or any securities or other property
received by a trust in exchange for securities) are credited to the Capital
Account of a trust for distribution to unitholders or to meet redemptions.
Except for failed securities and as provided herein, in the prospectus or in the
trust agreement, the acquisition by a trust of any securities other than the
portfolio securities is prohibited.

Because certain of the securities in certain of the trusts may from time to
time under certain circumstances be sold or otherwise liquidated and because the
proceeds from such events will be distributed to unitholders and will not be
reinvested, no assurance can be given that a trust will retain for any length of
time its present size and composition. Neither the sponsor nor the trustee
shall be liable in any way for any default, failure or defect in any security.
In the event of a failure to deliver any security that has been purchased for a
trust under a contract ("Failed Securities"), the sponsor is authorized under
the trust agreement to direct the trustee to acquire other securities
("Replacement Securities") to make up the original corpus of such trust.

The Replacement Securities must be purchased within 20 days after delivery
of the notice that a contract to deliver a security will not be honored and the
purchase price may not exceed the amount of funds reserved for the purchase of
the Failed Securities. The Replacement Securities must be equity securities of
the type selected for the trust and must not adversely affect the federal income
tax status of the trust. Whenever a Replacement Security is acquired for a
trust, the trustee shall notify all unitholders of the trust of the acquisition
of the Replacement Security and shall, on the next monthly distribution date
which is more than 30 days thereafter, make a pro rata distribution of the
amount, if any, by which the cost to the trust of the Failed Security exceeded
the cost of the Replacement Security. Once all of the securities in a trust are
acquired, the trustee will have no power to vary the investments of the trust,
i.e., the trustee will have no managerial power to take advantage of market
variations to improve a unitholder's investment.

If the right of limited substitution described in the preceding paragraphs
is not utilized to acquire Replacement Securities in the event of a failed
contract, the sponsor will refund the sales fee attributable to such Failed
Securities to all unitholders of the trust and the trustee will distribute the
cash attributable to such Failed Securities not more than 30 days after the date
on which the trustee would have been required to purchase a Replacement
Security. In addition, unitholders should be aware that, at the time of receipt
of such cash, they may not be able to reinvest such proceeds in other securities
at a return equal to or in excess of the return which such proceeds would have
earned for unitholders of such trust.

In the event that a Replacement Security is not acquired by a trust, the
income for such trust may be reduced.

-4-

To the best of the sponsor's knowledge, there is no litigation pending as
of the trust's inception in respect of any security that might reasonably be
expected to have a material adverse effect on the trust. At any time after the
trust's inception, litigation may be instituted on a variety of grounds with
respect to the securities. The sponsor is unable to predict whether any such
litigation may be instituted, or if instituted, whether such litigation might
have a material adverse effect on the trust. The sponsor and the trustee shall
not be liable in any way for any default, failure or defect in any security.

CLOSED-END FUNDS

Closed-end funds are actively managed investment companies that invest in
various types of securities. Closed-end funds issue shares of common stock that
are generally traded on a securities exchange (although some closed-end fund
shares are not listed on a securities exchange). Closed-end funds are subject
to various risks, including management's ability to meet the closed-end fund's
investment objective, and to manage the closed-end fund portfolio when the
underlying securities are redeemed or sold, during periods of market turmoil and
as investors' perceptions regarding closed-end funds or their underlying
investments change.

Certain of the closed-end funds included in the trust may employ the use of
leverage in their portfolios through the issuance of preferred stock. While
leverage often serves to increase the yield of a closed-end fund, this leverage
also subjects the closed-end fund to increased risks. These risks may include
the likelihood of increased volatility and the possibility that the closed-end
fund's common share income will fall if the dividend rate on the preferred
shares or the interest rate on any borrowings rises.

RISK FACTORS

MARKET RISK. Because the trust invests in securities, you should understand
the risks of investing in securities before purchasing units. These risks
include the risk that the financial condition of the company or the general
condition of the stock market may worsen and the value of the securities (and
therefore units) will fall. Securities are especially susceptible to general
stock market movements. The value of securities often rises or falls rapidly and
unpredictably as market confidence and perceptions of companies change. These
perceptions are based on factors including expectations regarding government
economic policies, inflation, interest rates, economic expansion or contraction,
political climates and economic or banking crises. The value of units will
fluctuate with the value of the securities in the trust and may be more or less
than the price you originally paid for your units. As with any investment, we
cannot guarantee that the performance of the trust will be positive over any
period of time. Because the trust is unmanaged, the Trustee will not sell
securities in response to market fluctuations as is common in managed

-5-

investments. In addition, because some trusts hold a relatively small number of
securities, you may encounter greater market risk than in a more diversified
investment.

DIVIDENDS. Stocks represent ownership interests in a company and are not
obligations of the company. Common stockholders have a right to receive
payments from the company that is subordinate to the rights of creditors,
bondholders or preferred stockholders of the company. This means that common
stockholders have a right to receive dividends only if a company's board of
directors declares a dividend and the company has provided for payment of all of
its creditors, bondholders and preferred stockholders. If a company issues
additional debt securities or preferred stock, the owners of these securities
will have a claim against the company's assets before common stockholders if the
company declares bankruptcy or liquidates its assets even though the common
stock was issued first. As a result, the company may be less willing or able to
declare or pay dividends on its common stock.

FINANCIAL SERVICES INDUSTRY. Your trust may concentrate in securities of
issuers in the financial services industry.

Banks and their holding companies are especially subject to the adverse
effects of economic recession; volatile interest rates; portfolio concentrations
in geographic markets and in commercial and residential real estate loans; and
competition from new entrants in their fields of business. In addition, banks
and their holding companies are extensively regulated at both the federal and
state level and may be adversely affected by increased regulations. Banks will
face increased competition from nontraditional lending sources as regulatory
changes, such as the Gramm-Leach-Bliley financial services overhaul legislation,
permit new entrants to offer various financial products. Technological advances
such as the Internet allow these nontraditional lending sources to cut overhead
and permit the more efficient use of customer data. Banks are already facing
tremendous pressure from mutual funds, brokerage firms and other financial
service providers in the competition to furnish services that were traditionally
offered by banks.

Companies engaged in investment management and broker-dealer activities are
subject to volatility in their earnings and share prices that often exceeds the
volatility of the equity market in general. Adverse changes in the direction of
the stock market, investor confidence, equity transaction volume, the level and
direction of interest rates and the outlook of emerging markets could adversely
affect the financial stability, as well as the stock prices, of these companies.
Additionally, competitive pressures, including increased competition with new
and existing competitors, the ongoing commoditization of traditional businesses
and the need for increased capital expenditures on new technology could
adversely impact the profit margins of companies in the investment management
and brokerage industries. Companies involved in investment management and
broker-dealer activities are also subject to extensive regulation by government
agencies and self-regulatory organizations, and changes in laws, regulations or
rules, or in the interpretation of such laws, regulations and rules could
adversely affect the stock prices of such companies.

-6-

the imposition of premium rate caps, a misapprehension of the risks involved in
given underwritings, competition and pressure to compete globally, weather
catastrophes or other disasters and the effects of client mergers. Already
extensively regulated, insurance companies' profits may be adversely affected by
increased government regulations or tax law changes.

Financial services companies have faced significant difficulty related to
the downturn in the housing and mortgage lending markets, corresponding declines
in the value of mortgage-backed securities and the resulting impact on all areas
of the financial services industry and the broader economy. These difficulties
have given rise to considerable uncertainty regarding the global economy and
financial services companies, in particular. The downturn has also led to
considerable write-downs in the values of many assets held by financial services
companies and a tightening of credit markets that has been marked by a general
unwillingness of many entities to extend credit. These factors have caused a
significant need for many financial services companies to raise capital to meet
obligations and to satisfy regulatory and contractual capital requirements.
Many well-established financial services companies have been forced to seek
additional capital through issuances of new preferred or common equity and
certain companies have been forced to agree to be acquired by other companies
(or sell some or all of their assets to other companies). In some cases
government assistance, guarantees or direct participation in investments or
acquisitions have been necessary to facilitate these transactions. In
addition, concerns regarding these issues and their potential negative impact to
the U.S. and global economies have resulted in extreme volatility in securities
prices and uncertain market conditions.

In response to these issues, government authorities in the U.S. and other
countries have initiated and may continue to engage in administrative and
legislative action intended to address both short- and long-term difficulties
facing the housing and mortgage lending markets, mortgage backed securities, the
financial services industry and the broader economy. These government actions
may include, but are not limited to, restrictions on investment activities;
increased oversight, regulation and involvement in financial services company
practices; adjustments to capital requirements; the acquisition of interests in
and the extension of credit to private entities; and increased investigation
efforts into the actions of companies and individuals in the financial service
industry. No one can predict any action that might be taken or the effect any
action or inaction will have. It is possible that any actions taken by
government authorities will not address or help improve the state of these
difficulties as intended. No one can predict the impact that the difficulties
will have on the economy, generally or financial services companies. The
difficulties and corresponding government action or inaction may have far
reaching consequences and your investment may be adversely affected by such
developments.

Banks and their holding companies are subject to extensive federal
regulation and, when such institutions are state-chartered, to state regulation
as well. Such regulations impose strict capital requirements and limitations on
the nature and extent of business activities that banks may pursue. Furthermore,
bank regulators have a wide range of discretion in connection with their
supervisory and enforcement authority and may substantially restrict the
permissible activities of a particular institution if deemed to pose significant
risks to the soundness of such institution or the safety of the federal deposit
insurance fund. Regulatory actions, such as increases in the minimum capital
requirements applicable to banks and increases in deposit

-7-

insurance premiums required to be paid by banks and thrifts to the Federal
Deposit Insurance Corporation ("FDIC"), can negatively impact earnings and the
ability of a company to pay dividends. Neither federal insurance of deposits nor
governmental regulations, however, insures the solvency or profitability of
banks or their holding companies, or insures against any risk of investment in
the securities issued by such institutions.

The statutory requirements applicable to, and regulatory supervision of,
banks and their holding companies have increased significantly and have
undergone substantial change in the past. To a great extent, these changes are
embodied in the Financial Institutions Reform, Recovery and Enforcement Act,
enacted in August 1989; the Federal Deposit Insurance Corporation Improvement
Act of 1991, and the regulations promulgated under these laws. The impact of
these laws on the business, financial condition and prospects of the Securities
in the Trust's portfolio cannot be predicted with certainty. The Gramm-Leach-
Bliley financial services overhaul legislation allows banks, securities firms
and insurance companies to form one-stop financial conglomerates marketing a
wide range of financial service products to investors. This legislation will
likely result in increased merger activity and heightened competition among
existing and new participants in the field. Legislation to liberalize interstate
banking has also been enacted. Under the legislation, banks are able to purchase
or establish subsidiary banks in any state. Since mid-1997, banks have been
allowed to turn existing banks into branches. Consolidation may continue. The
Securities and Exchange Commission and the Financial Accounting Standards Board
require the expanded use of market value accounting by banks and have imposed
rules requiring market accounting for investment securities held in trading
accounts or available for sale. Adoption of additional such rules may result in
increased volatility in the reported health of the industry, and mandated
regulatory intervention to correct such problems. Additional legislative and
regulatory changes may be forthcoming. For example, the bank regulatory
authorities have proposed substantial changes to the Community Reinvestment Act
and fair lending laws, rules and regulations, and there can be no certainty as
to the effect, if any, that such changes would have on the Securities in the
Trust's portfolio. In addition, from time to time the deposit insurance system
is reviewed by Congress and federal regulators, and proposed reforms of that
system could, among other things, further restrict the ways in which deposited
moneys can be used by banks or reduce the dollar amount or number of deposits
insured for any depositor. Such reforms could reduce profitability, as
investment opportunities available to bank institutions become more limited and
as consumers look for savings vehicles other than bank deposits. Banks face
significant competition from other financial institutions such as mutual funds,
credit unions, mortgage banking companies and insurance companies, and increased
competition may result from legislative broadening of regional and national
interstate banking powers. Among other benefits, such legislation allows banks
and bank holding companies to acquire across previously prohibited state lines
and to consolidate their various bank subsidiaries into one unit. Neither the
Sponsor nor the Underwriter makes any prediction as to what, if any, manner of
bank regulatory actions might ultimately be adopted or what ultimate effect such
actions might have on the Trust's portfolio.

The Federal Bank Holding Company Act of 1956 generally prohibits a bank
holding company from (1) acquiring, directly or indirectly, more than 5% of the
outstanding shares of any class of voting securities of a bank or bank holding
company, (2) acquiring control of a bank or another bank holding company, (3)
acquiring all or substantially all the assets of a bank, or (4)

-8-

merging or consolidating with another bank holding company, without first
obtaining Federal Reserve Board ("FRB") approval. In considering an application
with respect to any such transaction, the FRB is required to consider a variety
of factors, including the potential anti-competitive effects of the transaction,
the financial condition and future prospects of the combining and resulting
institutions, the managerial resources of the resulting institution, the
convenience and needs of the communities the combined organization would serve,
the record of performance of each combining organization under the Community
Reinvestment Act and the Equal Credit Opportunity Act, and the prospective
availability to the FRB of information appropriate to determine ongoing
regulatory compliance with applicable banking laws. In addition, the federal
Change In Bank Control Act and various state laws impose limitations on the
ability of one or more individuals or other entities to acquire control of banks
or bank holding companies.

The FRB has issued a policy statement on the payment of cash dividends by
bank holding companies. In the policy statement, the FRB expressed its view that
a bank holding company experiencing earnings weaknesses should not pay cash
dividends which exceed its net income or which could only be funded in ways that
would weaken its financial health, such as by borrowing. The FRB also may impose
limitations on the payment of dividends as a condition to its approval of
certain applications, including applications for approval of mergers and
acquisitions. Neither the Sponsor nor the Underwriter makes any prediction as to
the effect, if any, such laws will have on the Securities or whether such
approvals, if necessary, will be obtained.

Companies engaged in investment management and brokerage activities are
subject to the adverse effects of economic recession, volatile interest rates,
and competition from new entrants in their fields of business. Adverse changes
in the direction of the stock market, investor confidence, the financial health
of customers, equity transaction volume, the level and direction of interest
rates and the outlook of emerging markets could adversely affect the financial
stability, as well as the stock prices, of these companies. Additionally,
competitive pressures, including increased competition from new and existing
competitors, the ongoing commoditization of traditional businesses and the need
for increased capital expenditures on new technology could adversely impact the
profit margins of companies in the investment management and brokerage
industries. Companies involved in investment management and brokerage activities
are also subject to extensive regulation by government agencies and self-
regulatory organizations, and changes in laws, regulations or rules, or in the
interpretation of such laws, regulations and rules could adversely affect the
stock prices of such companies.

Companies involved in the insurance, reinsurance and risk management
industry underwrite, sell or distribute property, casualty and business
insurance. Many factors affect insurance, reinsurance and risk management
company profits, including but not limited to interest rate movements, the
imposition of premium rate caps, a misapprehension of the risks involved in
given underwritings, competition and pressure to compete globally, weather
catastrophes or other natural or man-made disasters and the effects of client
mergers. Individual companies may be exposed to material risks including reserve
inadequacy and the inability to collect from reinsurance carriers. Insurance
companies are subject to extensive governmental regulation, including the
imposition of maximum rate levels, which may not be adequate for

-9-

some lines of business. Proposed or potential tax law changes may also adversely
affect insurance companies' policy sales, tax obligations and profitability. In
addition to the foregoing, profit margins of these companies continue to shrink
due to the commoditization of traditional businesses, new competitors, capital
expenditures on new technology and the pressure to compete globally.

In addition to the normal risks of business, companies involved in the
insurance and risk management industry are subject to significant risk factors,
including those applicable to regulated insurance companies, such as:

* the inherent uncertainty in the process of establishing property-liability
loss reserves, and the fact that ultimate losses could materially exceed
established loss reserves, which could have a material adverse effect on
results of operations and financial condition;

* the fact that insurance companies have experienced, and can be expected in
the future to experience, catastrophic losses, which could have a material
adverse impact on their financial conditions, results of operations and
cash flow;

* the inherent uncertainty in the process of establishing property-liability
loss reserves due to changes in loss payment patterns caused by new claim
settlement practices;

* the need for insurance companies and their subsidiaries to maintain
appropriate levels of statutory capital and surplus, particularly in light
of continuing scrutiny by rating organizations and state insurance
regulatory authorities, and in order to maintain acceptable financial
strength or claims-paying ability ratings;

* the extensive regulation and supervision to which insurance companies are
subject, and various regulatory and other legal actions;

* the adverse impact that increases in interest rates could have on the value
of an insurance company's investment portfolio and on the attractiveness of
certain of its products; and

* the uncertainty involved in estimating the availability of reinsurance and
the collectibility of reinsurance recoverables.

The state insurance regulatory framework has, during recent years, come
under increased federal scrutiny, and certain state legislatures have considered
or enacted laws that alter and, in many cases, increase state authority to
regulate insurance companies and insurance holding company systems. Further, the
National Association of Insurance Commissioners ("NAIC") and state insurance
regulators are re-examining existing laws and regulations, specifically focusing
on insurance companies, interpretations of existing laws and the development of
new laws. In addition, Congress and certain federal agencies have investigated
the condition of the insurance industry in the United States to determine
whether to promulgate additional federal regulation.

-10-

The Sponsor is unable to predict whether any state or federal legislation will
be enacted to change the nature or scope of regulation of the insurance
industry, or what effect, if any, such legislation would have on the industry.

All insurance companies are subject to state laws and regulations that
require diversification of their investment portfolios and limit the amount of
investments in certain investment categories. Failure to comply with these laws
and regulations would cause non-conforming investments to be treated as non-
admitted assets for purposes of measuring statutory surplus and, in some
instances, would require divestiture.

The value of securities issued by financial services companies may also be
affected by the downturn in the housing and mortgage lending markets,
corresponding declines in the value of mortgage backed securities and the
resulting impact on all areas of the financial services industry. In response,
government authorities have initiated and may continue to engage in
administrative and legislative action intended to address both short- and long-
term difficulties facing the housing and mortgage lending markets, mortgage
backed securities, the financial services industry and the broader economy.
These government actions may include, but are not limited to, restrictions on
investment options, increased oversight, regulation and involvement in financial
services company practices, adjustments to capital requirements, the acquisition
of interests in and the extension of credit to private entities and increased
investigation efforts into the actions of companies and individuals in the
financial service industry. No one can predict the action that might be taken
or the effect any action or inaction will have and it is possible that any
actions taken by government authorities will not address or help improve the
state of these difficulties as intended. The downturn and corresponding
government action may have far reaching consequences into many geographic
regions and areas of financial services companies and, consequently, the value
of securities in the portfolio may decline in response to such developments.

BDCS. BDCs are closed-end investment companies that have elected to be
treated as business development companies under the Investment Company Act of
1940. BDCs are required to at least 70% of their investments in eligible assets
which include, among other things, (i) securities of eligible portfolio
companies (generally, domestic companies that are not investment companies and
that cannot have a class of securities listed on a national securities exchange
or have securities that are marginable that are purchased from that company in a
private transaction), (ii) securities received by the BDC in connection with its
ownership of securities of eligible portfolio companies, or (iii) cash, cash
items, government securities, or high quality debt securities maturing one year
or less from the time of investment.

BDCs' ability to grow and their overall financial condition is impacted
significantly by their ability to raise capital. In addition to raising capital
through the issuance of common stock, BDCs may engage in borrowing. This may
involve using revolving credit facilities, the securitization of loans through
separate wholly-owned subsidiaries and issuing of debt and preferred securities.
BDCs are less restricted than other closed-end funds as to the amount of debt
they can have outstanding. Generally, a BDC may not issue any class of senior
security representing an indebtedness unless, immediately after such issuance or
sale, it will have asset coverage of at least 200%. (Thus, for example, if a
BDC has $5 million in assets, it can borrow

-11-

up to $5 million, which would result in assets of $10 million and debt of $5
million.) These borrowings, also known as leverage, magnify the potential for
gain or loss on amounts invested and, accordingly, the risks associated with
investing in BDC securities. While the value of a BDC's assets increases,
leveraging would cause the net value per share of BDC common stock to increase
more sharply than it would have had such BDC not leveraged. However, if the
value of a BDC's assets decreases, leveraging would cause net asset value to
decline more sharply than it otherwise would have had such BDC not leveraged. In
addition to decreasing the value of a BDC's common stock, it could also
adversely impact a BDC's ability to make dividend payments. A BDC's credit
rating may change over time which could adversely affect their ability to obtain
additional credit and/or increase the cost of such borrowing. Agreements
governing BDC's credit facilities and related funding and service agreements may
contain various covenants that limit the BDC's discretion in operating its
business along with other limitations. Any defaults may restrict the BDC's
ability to manage assets securing related assets which may adversely impact the
BDC's liquidity and operations.

BDCs compete with other BDCs along with a large number of investment funds,
investment banks and other sources of financing to make their investments.
Competitors may have lower costs or access to funding sources that cause BDCs to
lose prospective investments if they do not match competitors' pricing, terms
and structure. As a result of this competition, there is no assurance that a
BDC will be able to identify and take advantage of attractive investment
opportunities or that they will fully be able to invest available capital.

BDCs may enter into hedging transaction and utilize derivative instruments
such as forward contracts, options and swaps. Unanticipated movements and
improper correlation of hedging instruments may prevent a BDC from hedging
against exposure to risk of loss. BDCs are required to make available
significant managerial assistance to their portfolio companies. Significant
managerial assistance refers to any arrangement whereby a BDC provides
significant guidance and counsel concerning the management, operations, or
business objectives and policies of a portfolio company. Examples of such
activities include arranging financing, managing relationships with financing
sources, recruiting management personnel, and evaluating acquisition and
divestiture opportunities. BDCs are frequently externally managed by an
investment adviser which may also provide this external managerial assistance to
portfolio companies. Such investment adviser's liability may be limited under
their investment advisory agreement which may lead such investment adviser to
act in a riskier manner than it would were

-12-

it investing for its own account. Such investment advisers may be entitled to
incentive compensation which may cause such adviser to make more speculative and
riskier investments than it would if investing for its own account. Such
compensation may be due even in the case of declines to the value of a BDC's
investments.

BDCs may issue options, warrants, and rights to convert to voting
securities to its officers, employees and board members. Any issuance of
derivative securities requires the approval of the company's board of directors
and authorization by the company's shareholders. A BDC may operate a profit-
sharing plan for its employees, subject to certain restrictions. BDCs frequently
have high expenses which may include, but are not limited to, the payment of
management fees, administration expenses, taxes, interest payable on debt,
governmental charges, independent director fees and expenses, valuation
expenses, and fees payable to third parties relating to or associated with
making investments. These expenses may fluctuate significantly over time.

If a BDC fails to maintain its status as a BDC it may be regulated as a
closed-end fund which would subject such BDC to additional regulatory
restrictions and significantly decrease its operating flexibility. In addition,
such failure could trigger an event of default under certain outstanding
indebtedness which could have a material adverse impact on its business. All of
the BDCs are closed-end funds.

CLOSED-END FUNDS. The closed-end funds in the trust invest in various
securities. As such, an investment in units of the trust should be made with an
understanding of the risks of investing in both closed-end fund shares and such
securities.

Closed-end funds' portfolios are managed and their shares are generally
listed on a securities exchange. The net asset value of closed-end fund shares
will fluctuate with changes in the value of the underlying securities that the
closed-end fund owns. In addition, for various reasons closed-end fund shares
frequently trade at a discount from their net asset value in the secondary
market. The amount of such discount from net asset value is subject to change
from time to time in response to various factors. Closed-end funds' articles of
incorporation may contain certain anti-takeover provisions that may have the
effect of inhibiting a fund's possible conversion to open-end status and
limiting the ability of other persons to acquire control of a fund. In certain
circumstances, these provisions might also inhibit the ability of stockholders
(including the trust) to sell their shares at a premium over prevailing market
prices. This characteristic is a risk separate and distinct from the risk that
a fund's net asset value will decrease. In particular, this characteristic
would increase the loss or reduce the return on the sale of those closed-end
fund shares that were purchased by the trust at a premium. In the unlikely
event that a closed-end fund converts to open-end status at a time when its
shares are trading at a premium there would be an immediate loss in value to the
trust since shares of open-end funds trade at net asset value. Certain closed-
end funds may have in place or may put in place in the future plans pursuant to
which the fund may repurchase its own shares in the marketplace. Typically,
these plans are put in place in an attempt by a fund's board of directors to
reduce a discount on its share price. To the extent that such a plan is
implemented and shares owned by the trust are repurchased by a fund, the trust's
position in that fund will be reduced and the cash will be distributed.

-13-

The trust is prohibited from subscribing to a rights offering for shares of
any of the closed-end funds in which it invests. In the event of a rights
offering for additional shares of a fund, unitholders should expect that the
trust will, at the completion of the offer, own a smaller proportional interest
in such fund that would otherwise be the case. It is not possible to determine
the extent of this dilution in share ownership without knowing what proportion
of the shares in a rights offering will be subscribed. This may be particularly
serious when the subscription price per share for the offer is less than the
fund's net asset value per share. Assuming that all rights are exercised and
there is no change in the net asset value per share, the aggregate net asset
value of each shareholder's shares of common stock should decrease as a result
of the offer. If a fund's subscription price per share is below that fund's net
asset value per share at the expiration of the offer, shareholders would
experience an immediate dilution of the aggregate net asset value of their
shares of common stock as a result of the offer, which could be substantial.

Closed-end funds may use leveraging in their portfolios. Leveraging can be
expected to cause increased price volatility for those fund's shares, and as a
result, increased volatility for the price of the units of the trust. There can
be no assurance that a leveraging strategy will be successful during any period
in which it is employed.

MLPS. MLPs are limited partnership or limited liability companies that are
generally taxed as partnership whose interests are generally traded on
securities exchanges. An MLP consists of a general partner and limited
partners. The general partner manages the partnership, has an ownership stake
in the partnership and is eligible to receive an incentive distribution. The
limited partners provide capital to the partnership, have a limited (if any)
role in the operation and management of the partnership and receive cash
distributions. Most MLPs generally operate in the energy natural resources or
real estate sector and are subject to the risks generally applicable to
companies in those sectors. Those risks include, but are not limited to,
commodity pricing risk, supply and demand risk, depletion risk and exploration
risk. MLPs are also subject to the risk that authorities could challenge the tax
treatment of MLPs for federal income tax purposes which could have a negative
impact on the after-tax income available for distribution by the MLPs and/or the
value of the trust's investments.

FOREIGN ISSUERS. Since certain or all of the trust's portfolio securities
or the underlying securities held by certain of the closed-end funds trust are
issued by foreign companies, an investment in the trust involves certain
investment risks that are different in some respects from an investment in a
trust which invests entirely in the securities of domestic issuers. These
investment risks include future political or governmental restrictions which
might adversely affect the payment or receipt of payment of dividends on the
relevant securities, the possibility that the financial condition of the issuers
of the securities may become impaired or that the general condition of the
relevant stock market may worsen (both of which would contribute directly to a
decrease in the value of the securities and thus in the value of the units), the
limited liquidity and relatively small market capitalization of the relevant
securities market, expropriation or confiscatory taxation, economic
uncertainties and foreign currency devaluations and fluctuations. In addition,
for foreign issuers that are not subject to the reporting requirements of the
Securities Exchange Act of 1934, there may be less publicly available
information than is available from a domestic issuer. In addition, foreign
issuers are not necessarily subject to

-14-

uniform accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to domestic issuers. The securities
of many foreign issuers are less liquid and their prices more volatile than
securities of comparable domestic issuers. In addition, fixed brokerage
commissions and other transaction costs in foreign securities markets are
generally higher than in the United States and there is generally less
government supervision and regulation of exchanges, brokers and issuers in
foreign countries than there is in the United States. However, due to the
nature of the issuers of the securities in the closed-end funds selected for the
trust, the sponsor believes that adequate information will be available to allow
the Supervisor to provide portfolio surveillance for the trust.

Securities issued by non-U.S. issuers generally pay income in foreign
currencies and principally trade in foreign currencies. Therefore, there is a
risk that the U.S. dollar value of these securities will vary with fluctuations
in the U.S. dollar foreign exchange rates for the various securities.

There can be no assurance that exchange control regulations might not be
adopted in the future which might adversely affect payment to the closed-end
funds or the trust. The adoption of exchange control regulations and other
legal restrictions could have an adverse impact on the marketability of
international securities in the trust and on the ability of the trust to satisfy
its obligation to redeem units tendered to the trustee for redemption. In
addition, restrictions on the settlement of transactions on either the purchase
or sale side, or both, could cause delays or increase the costs associated with
the purchase and sale of the foreign Securities and correspondingly could affect
the price of the units.

Investors should be aware that it may not be possible to buy all securities
at the same time because of the unavailability of any security, and restrictions
applicable to the trust relating to the purchase of a security by reason of the
federal securities laws or otherwise.

Foreign securities generally have not been registered under the Securities
Act of 1933 and may not be exempt from the registration requirements of such
Act. Sales of non-exempt securities by a closed-end fund in the United States
securities markets are subject to severe restrictions and may not be
practicable. Accordingly, sales of these securities by a closed-end fund will
generally be effected only in foreign securities markets. Investors should
realize that the securities in the closed-end funds might be traded in foreign
countries where the securities markets are not as developed or efficient and may
not be as liquid as those in the United States. The value of the securities
will be adversely affected if trading markets for the securities are limited or
absent.

HIGH-YIELD SECURITIES. An investment in units of the trust should be made
with an understanding of the risks that an investment in "high-yield, high-risk"
debt obligations or "junk" obligations may entail, including increased credit
risks and the risk that the value of the units will decline, and may decline
precipitously, with increases in interest rates. In recent years there have
been wide fluctuations in interest rates and thus in the value of debt
obligations generally. Certain of the securities included in the funds in the
trust may be subject to greater market fluctuations and risk of loss of income
and principal than are investments in lower-yielding, higher-rated securities,
and their value may decline precipitously because of increases in interest

-15-

rates, not only because the increases in rates generally decrease values, but
also because increased rates may indicate a slowdown in the economy and a
decrease in the value of assets generally that may adversely affect the credit
of issuers of high-yield, high-risk securities resulting in a higher incidence
of defaults among high-yield, high-risk securities. A slowdown in the economy,
or a development adversely affecting an issuer's creditworthiness, may result in
the issuer being unable to maintain earnings or sell assets at the rate and at
the prices, respectively, that are required to produce sufficient cash flow to
meet its interest and principal requirements. For an issuer that has
outstanding both senior commercial bank debt and subordinated high-yield, high-
risk securities, an increase in interest rates will increase that issuer's
interest expense insofar as the interest rate on the bank debt is fluctuating.
However, many leveraged issuers enter into interest rate protection agreements
to fix or cap the interest rate on a large portion of their bank debt. This
reduces exposure to increasing rates, but reduces the benefit to the issuer of
declining rates. The sponsor cannot predict future economic policies or their
consequences or, therefore, the course or extent of any similar market
fluctuations in the future.

"High-yield" or "junk" securities, the generic names for securities rated
below BBB by Standard & Poor's, or below Baa by Moody's, are frequently issued
by corporations in the growth stage of their development, by established
companies whose operations or industries are depressed or by highly leveraged
companies purchased in leveraged buyout transactions. The market for high-yield
securities is very specialized and investors in it have been predominantly
financial institutions. High-yield securities are generally not listed on a
national securities exchange. Trading of high- yield securities, therefore,
takes place primarily in over-the-counter markets that consist of groups of
dealer firms that are typically major securities firms. Because the high-yield
security market is a dealer market, rather than an auction market, no single
obtainable price for a given security prevails at any given time. Prices are
determined by negotiation between traders. The existence of a liquid trading
market for the securities may depend on whether dealers will make a market in
the securities. There can be no assurance that a market will be made for any of
the securities, that any market for the securities will be maintained or of the
liquidity of the securities in any markets made. Not all dealers maintain
markets in all high-yield securities. Therefore, since there are fewer traders
in these securities than there are in "investment grade" securities, the bid-
offer spread is usually greater for high-yield securities than it is for
investment grade securities. The price at which the securities may be sold to
meet redemptions and the value of the trust will be adversely affected if
trading markets for the securities are limited or absent. If the rate of
redemptions is great, the value of the trust may decline to a level that
requires liquidation.

Lower-rated securities tend to offer higher yields than higher-rated
securities with the same maturities because the creditworthiness of the issuers
of lower-rated securities may not be as strong as that of other issuers.
Moreover, if a security is recharacterized as equity by the Internal Revenue
Service for federal income tax purposes, the issuer's interest deduction with
respect to the security will be disallowed and this disallowance may adversely
affect the issuer's credit rating. Because investors generally perceive that
there are greater risks associated with the lower-rated securities in the funds
in the trust, the yields and prices of these securities tend to fluctuate more
than higher- rated securities with changes in the perceived quality of the
credit of their issuers. In addition, the market value of high-yield, high-risk
securities may fluctuate more than the market value of higher-rated securities
since these securities tend to reflect short-term

-16-

credit development to a greater extent than higher-rated securities. Lower-
rated securities generally involve greater risks of loss of income and principal
than higher-rated securities. Issuers of lower-rated securities may possess
fewer creditworthiness characteristics than issuers of higher-rated securities
and, especially in the case of issuers whose obligations or credit standing have
been downgraded, may be subject to claims by debtholders, owners of property
leased to the issuer or others which, if sustained, would make it more difficult
for the issuers to meet their payment obligations. High-yield, high-risk
securities are also affected by variables such as interest rates, inflation
rates and real growth in the economy. Therefore, investors should consider
carefully the relative risks associated with investment in securities that carry
lower ratings.

The value of the shares of the closed-end funds reflects the value of the
portfolio securities, including the value (if any) of securities in default.
Should the issuer of any security default in the payment of principal or
interest, the closed-end funds in the trust may incur additional expenses
seeking payment on the defaulted security. Because amounts (if any) recovered
by the funds in payment under the defaulted security may not be reflected in the
value of the fund shares until actually received by the funds, and depending
upon when a unitholder purchases or sells his or her units, it is possible that
a unitholder would bear a portion of the cost of recovery without receiving any
portion of the payment recovered.

High-yield, high-risk securities are generally subordinated obligations.
The payment of principal (and premium, if any), interest and sinking fund
requirements with respect to subordinated obligations of an issuer is
subordinated in right of payment to the payment of senior obligations of the
issuer. Senior obligations generally include most, if not all, significant debt
obligations of an issuer, whether existing at the time of issuance of
subordinated debt or created thereafter. Upon any distribution of the assets of
an issuer with subordinated obligations upon dissolution, total or partial
liquidation or reorganization of or similar proceeding relating to the issuer,
the holders of senior indebtedness will be entitled to receive payment in full
before holders of subordinated indebtedness will be entitled to receive any
payment. Moreover, generally no payment with respect to subordinated
indebtedness may be made while there exists a default with respect to any senior
indebtedness. Thus, in the event of insolvency, holders of senior indebtedness
of an issuer generally will recover more, ratably, than holders of subordinated
indebtedness of that issuer.

Obligations that are rated lower than "BBB" by Standard & Poor's, or "Baa"
by Moody's, respectively, should be considered speculative as such ratings
indicate a quality of less than investment grade. Investors should carefully
review the objective of the trust and consider their ability to assume the risks
involved before making an investment in the trust.

CONVERTIBLE SECURITIES RISKS. The closed-end funds held by a trust may
invest in convertible securities. Convertible securities generally offer lower
interest or dividend yields than non-convertible fixed-income securities of
similar credit quality because of the potential for capital appreciation. The
market values of convertible securities tend to decline as interest rates
increase and, conversely, to increase as interest rates decline. However, a
convertible security's market value also tends to reflect the market price of
the common stock of the issuing company, particularly when the stock price is
greater than the convertible security's conversion price. The

-17-

conversion price is defined as the predetermined price or exchange ratio at
which the convertible security can be converted or exchanged for the underlying
common stock. As the market price of the underlying common stock declines below
the conversion price, the price of the convertible security tends to be
increasingly influenced more by the yield of the convertible security than by
the market price of the underlying common stock. Thus, it may not decline in
price to the same extent as the underlying common stock, and convertible
securities generally have less potential for gain or loss than common stocks.
However, mandatory convertible securities (as discussed below) generally do not
limit the potential for loss to the same extent as securities convertible at the
option of the holder. In the event of a liquidation of the issuing company,
holders of convertible securities would be paid before that company's common
stockholders. Consequently, an issuer's convertible securities generally entail
less risk than its common stock. However, convertible securities fall below debt
obligations of the same issuer in order of preference or priority in the event
of a liquidation and are typically unrated or rated lower than such debt
obligations. In addition, contingent payment, convertible securities allow the
issuer to claim deductions based on its nonconvertible cost of debt, which
generally will result in deduction in excess of the actual cash payments made on
the securities (and accordingly, holders will recognize income in amounts in
excess of the cash payments received).

Mandatory convertible securities are distinguished as a subset of
convertible securities because the conversion is not optional and the conversion
price at maturity is based solely upon the market price of the underlying common
stock, which may be significantly less than par or the price (above or below
par) paid. For these reasons, the risks associated with investing in mandatory
convertible securities most closely resemble the risks inherent in common
stocks. Mandatory convertible securities customarily pay a higher coupon yield
to compensate for the potential risk of additional price volatility and loss
upon conversion. Because the market price of a mandatory convertible security
increasingly corresponds to the market price of its underlying common stock as
the convertible security approaches its conversion date, there can be no
assurance that the higher coupon will compensate for the potential loss.

SENIOR LOANS. The closed-end funds held by a trust may invest in senior
loans issued by banks, other financial institutions, and other investors to
corporations, partnerships, limited liability companies and other entities to
finance leveraged buyouts, recapitalizations, mergers, acquisitions, stock
repurchases, debt refinancings and, to a lesser extent, for general operating
and other purposes. Senior loans in which the closed-end funds invest:

* generally are of below investment grade credit quality;

* may be unrated at the time of investment;

* generally are not registered with the SEC or any state securities
commission; and

* generally are not listed on any securities exchange.

An investment by closed-end funds in senior loans involves risk that the
borrowers under senior loans may default on their obligations to pay principal
or interest when due. Although senior loans may be secured by specific
collateral, there can be no assurance that liquidation of

-18-

collateral would satisfy the borrower's obligation in the event of non-payment
or that such collateral could be readily liquidated. Senior loans are typically
structured as floating rate instruments in which the interest rate payable on
the obligation fluctuates with interest rate changes. As a result, the yield on
closed-end funds investing in senior loans will generally decline in a falling
interest rate environment and increase in a rising interest rate environment.

The amount of public information available on senior loans generally will
be less extensive than that available for other types of assets. No reliable,
active trading market currently exists for many senior loans, although a
secondary market for certain senior loans has developed over the past several
years. Senior loans are thus relatively illiquid. Liquidity relates to the
ability of a closed-end fund to sell an investment in a timely manner at a price
approximately equal to its value on the closed-end fund's books. The illiquidity
of senior loans may impair a closed-end fund's ability to realized the full
value of its assets in the event of a voluntary or involuntary liquidation of
such assets. Because of the lack of an active trading market, illiquid
securities are also difficult to value and prices provided by external pricing
services may not reflect the true value of the securities. However, many senior
loans are of a large principal amount and are held by a large number of
financial institutions. To the extent that a secondary market does exist for
certain senior loans, the market may be subject to irregular trading activity,
wide bid/ask spreads and extended trade settlement periods. The market for
senior loans could be disrupted in the event of an economic downturn or a
substantial increase or decrease in interest rates. This could result in
increased volatility in the market and in the trust's net asset value.

If legislation or state or federal regulators impose additional
requirements or restrictions on the ability of financial institutions to make
loans that are considered highly leveraged transactions, the availability of
senior loans for investment by the closed-end funds may be adversely affected.
In addition, such requirements or restrictions could reduce or eliminate sources
of financing for certain borrowers. This would increase the risk of default. If
legislation or federal or state regulators require financial institutions to
dispose of senior loans that are considered highly leveraged transactions or
subject such senior loans to increased regulatory scrutiny, financial
institutions may determine to sell such senior loans. Such sales could result in
depressed prices. If a closed-end fund attempts to sell a senior loan at a time
when a financial institution is engaging in such a sale, the price a closed-end
fund could get for the senior loan may be adversely affected.

Some senior loans are subject to the risk that a court, pursuant to
fraudulent conveyance or other similar laws, could subordinate the senior loans
to presently existing or future indebtedness of the borrower or take other
action detrimental to lenders. Such court action could under certain
circumstances include invalidation of senior loans. Any lender, which could
include a closed-end fund, is subject to the risk that a court could find the
lender liable for damages in a claim by a borrower arising under the common laws
of tort or contracts or anti-fraud provisions of certain securities laws for
actions taken or omitted to be taken by the lenders under the relevant terms of
a loan agreement or in connection with actions with respect to the collateral
underlying the senior loan.

PREFERRED STOCK RISKS. The closed-end funds held by a trust may invest in
preferred stocks. Preferred stocks may be susceptible to general stock market
movements and to volatile

-19-

increases and decreases of value as market confidence in and perceptions of the
issuers change. These perceptions are based on unpredictable factors, including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, market
liquidity, and global or regional political, economic or banking crises.
Preferred stocks are also vulnerable to Congressional reductions in the
dividends-received deduction which would adversely affect the after-tax return
to the investors who can take advantage of the deduction. Such a reduction might
adversely affect the value of preferred stocks in general. Holders of preferred
stocks, as owners of the entity, have rights to receive payments from the
issuers of those preferred stocks that are generally subordinate to those of
creditors of, or holders of debt obligations or, in some cases, other senior
preferred stocks of, such issuers. Preferred stocks do not represent an
obligation of the issuer and, therefore, do not offer any assurance of income or
provide the same degree of protection of capital as do debt securities. The
issuance of additional debt securities or senior preferred stocks will create
prior claims for payment of principal and interest and senior dividends which
could adversely affect the ability and inclination of the issuer to declare or
pay dividends on its preferred stock or the rights of holders of preferred stock
with respect to assets of the issuer upon liquidation or bankruptcy. The value
of preferred stocks is subject to market fluctuations for as long as the
preferred stocks remain outstanding, and thus the value of the securities may be
expected to fluctuate over the life of the trust to values higher or lower than
those prevailing on the trust's inception date.

TRUST PREFERRED SECURITIES RISKS. The closed-end funds held by a trust may
invest in various preferred securities. Holders of trust preferred securities
incur risks in addition to or slightly different than the typical risks of
holding preferred stocks. Trust preferred securities are limited-life preferred
securities that are typically issued by corporations, generally in the form of
interest-bearing notes or preferred securities issued by corporations, or by an
affiliated business trust of a corporation, generally in the form of beneficial
interests in subordinated debentures issued by the corporation, or similarly
structured securities. The maturity and dividend rate of the trust preferred
securities are structured to match the maturity and coupon interest rate of the
interest-bearing notes, preferred securities or subordinated debentures. Trust
preferred securities usually mature on the stated maturity date of the interest-
bearing notes, preferred securities or subordinated debentures and may be
redeemed or liquidated prior to the stated maturity date of such instruments for
any reason on or after their stated call date or upon the occurrence of certain
circumstances at any time. Trust preferred securities generally have a yield
advantage over traditional preferred stocks, but unlike preferred stocks,
distributions on the trust preferred securities are generally treated as
interest rather than dividends for federal income tax purposes. Unlike most
preferred stocks, distributions received from trust preferred securities are
generally not eligible for the dividends received deduction. Certain of the
risks unique to trust preferred securities include: (i) distributions on trust
preferred securities will be made only if interest payments on the interest-
bearing notes, preferred securities or subordinated debentures are made; (ii) a
corporation issuing the interest-bearing notes, preferred securities or
subordinated debentures may defer interest payments on these instruments for up
to 20 consecutive quarters and if such election is made, distributions will not
be made on the trust preferred securities during the deferral period; (iii)
certain tax or regulatory events may trigger the redemption of the interest-
bearing notes, preferred securities or subordinated debentures by the issuing
corporation and result in prepayment of the trust preferred securities prior to
their stated maturity date; (iv) future legislation may be proposed or enacted
that may prohibit the corporation from deducting

-20-

its interest payments on the interest-bearing notes, preferred securities or
subordinated debentures for tax purposes, making redemption of these instruments
likely; (v) a corporation may redeem the interest-bearing notes, preferred
securities or subordinated debentures in whole at any time or in part from time
to time on or after a stated call date; (vi) trust preferred securities holders
have very limited voting rights; and (vii) payment of interest on the interest-
bearing notes, preferred securities or subordinated debentures, and therefore
distributions on the trust preferred securities, is dependent on the financial
condition of the issuing corporation.

REAL ESTATE INVESTMENT TRUSTS. Many factors can have an adverse impact on
the performance of a particular real estate investment trust ("REIT"), including
its cash available for distribution, the credit quality of a particular REIT or
the real estate industry generally. The success of REITs depends on various
factors, including the occupancy and rent levels, appreciation of the underlying
property and the ability to raise rents on those properties. Economic recession,
overbuilding, tax law changes, higher interest rates or excessive speculation
can all negatively impact REITs, their future earnings and share prices.

Risks associated with the direct ownership of real estate include, among
other factors,

* general U.S. and global as well as local economic conditions,

* decline in real estate values,

* the financial health of tenants,

* overbuilding and increased competition for tenants,

* oversupply of properties for sale,

* changing demographics,

* changes in interest rates, tax rates and other operating expenses,

* changes in government regulations,

* changes in zoning laws,

* the ability of the owner to provide adequate management, maintenance and
insurance,

* faulty construction and the ongoing need for capital improvements,

* the cost of complying with the Americans with Disabilities Act,

* regulatory and judicial requirements, including relating to liability for
environmental hazards,

* natural or man-made disasters,

-21-

* changes in the perception of prospective tenants of the safety, convenience
and attractiveness of the properties changes in neighborhood values and
buyer demand, and

* the unavailability of construction financing or mortgage loans at rates
acceptable to developers.

Variations in rental income and space availability and vacancy rates in
terms of supply and demand are additional factors affecting real estate
generally and REITs in particular. Properties owned by a REIT may not be
adequately insured against certain losses and may be subject to significant
environmental liabilities, including remediation costs.

The value of real estate investments may also be affected by the downturn
in the subprime mortgage lending market in the United States. Subprime loans
have higher defaults and losses than prime loans. Subprime loans also have
higher serious delinquency rates than prime loans. The downturn in the subprime
mortgage lending market may have far-reaching consequences into many aspects and
geographic regions of the real estate business, and consequently, the value of
the portfolio may decline in response to such developments.

You should also be aware that REITs may not be diversified and are subject
to the risks of financing projects. The real estate industry may be cyclical,
and, if the Trust acquires REIT Securities at or near the top of the cycle,
there is increased risk of a decline in value of the REIT Securities and
therefore the value of the Units. REITs are also subject to defaults by
borrowers and the market's perception of the REIT industry generally.

Because of their structure, and the legal requirement that they distribute
at least 90% of their taxable income to shareholders annually, REITs require
frequent amounts of new funding, through both borrowing money and issuing stock.
Thus, REITs historically have frequently issued substantial amounts of new
equity shares (or equivalents) to purchase or build new properties. This may
have adversely affected REIT equity share market prices. Both existing and new
share issuances may have an adverse effect on these prices in the future,
especially when REITs continue to issue stock when real estate prices are
relatively high and stock prices are relatively low.

The value of REITs may also be affected by the downturn in the housing and
mortgage lending markets. In response, government authorities have initiated
and may continue to engage in administrative and legislative action intended to
address both short- and long-term difficulties facing the housing and mortgage
lending markets and the broader economy. No one can predict the action that
might be taken or the effect any action or inaction will have and it is possible
that any actions taken by government authorities will not address or help
improve the state of these difficulties as intended. The downturn and
corresponding government action may have far reaching consequences into many
geographic regions and, consequently, the value of securities in the portfolio
may decline in response to such developments.

DISCOUNT SECURITIES. Certain of the securities held by the closed-end
funds in the trust may have been acquired at a market discount from par value at
maturity. The coupon interest rates on the discount securities at the time they
were purchased and deposited in the funds were

-22-

lower than the current market interest rates for newly issued securities of
comparable rating and type. If such interest rates for newly issued comparable
securities increase, the market discount of previously issued securities will
become greater, and if such interest rates for newly issued comparable
securities decline, the market discount of previously issued securities will be
reduced, other things being equal. Investors should also note that the value of
securities purchased at a market discount will increase in value faster than
securities purchased at a market premium if interest rates decrease.
Conversely, if interest rates increase, the value of securities purchased at a
market discount will decrease faster than securities purchased at a market
premium. In addition, if interest rates rise, the prepayment risk of higher
yielding, premium securities and the prepayment benefit for lower yielding,
discount securities will be reduced. Market discount attributable to interest
changes does not indicate a lack of market confidence in the issue. Neither the
sponsor nor the trustee shall be liable in any way for any default, failure or
defect in any of the securities.

PREMIUM SECURITIES. Certain of the securities held by the closed-end funds
in the trust may have been acquired at a market premium from par value at
maturity. The coupon interest rates on the premium securities at the time they
were purchased by the fund were higher than the current market interest rates
for newly issued securities of comparable rating and type. If such interest
rates for newly issued and otherwise comparable securities decrease, the market
premium of previously issued securities will be increased, and if such interest
rates for newly issued comparable securities increase, the market premium of
previously issued securities will be reduced, other things being equal. The
current returns of securities trading at a market premium are initially higher
than the current returns of comparable securities of a similar type issued at
currently prevailing interest rates because premium securities tend to decrease
in market value as they approach maturity when the face amount becomes payable.
Because part of the purchase price is thus returned not at maturity but through
current income payments, early redemption of a premium security at par or early
prepayments of principal will result in a reduction in yield. Redemption
pursuant to call provisions generally will, and redemption pursuant to sinking
fund provisions may, occur at times when the redeemed securities have an
offering side valuation which represents a premium over par or for original
issue discount securities a premium over the accreted value.

OPTION RISK. The closed-end funds held in the trust generally invest using
a covered call option strategy or similar income-oriented investment strategies.
You should understand the risks of these strategies before you invest. In
employing a covered call strategy, a closed-end fund will generally write (sell)
call options on a significant portion of the fund's managed assets. These call
options will give the option holder the right, but not the obligation, to
purchase a security from the fund at the strike price on or prior to the
option's expiration date. The ability to successfully implement the fund's
investment strategy depends on the fund adviser's ability to predict pertinent
market movements, which cannot be assured. Thus, the use of options may require
a fund to sell portfolio securities at inopportune times or for prices other
than current market values, may limit the amount of appreciation the fund can
realize on an investment, or may cause the fund to hold a security that it might
otherwise sell. The writer (seller) of an option has no control over the time
when it may be required to fulfill its obligation as a writer (seller) of the
option. Once an option writer (seller) has received an exercise notice, it
cannot effect a closing purchase transaction in order to terminate its
obligation under the option and must deliver

-23-

the underlying security at the exercise price. As the writer (seller) of a
covered call option, a fund forgoes, during the option's life, the opportunity
to profit from increases in the market value of the security underlying the call
option above the sum of the premium and the strike price of the call option, but
has retained the risk of loss should the price of the underlying security
decline. The value of the options written (sold) by a fund, which will be
marked-to-market on a daily basis, will be affected by changes in the value and
dividend rates of the underlying equity securities, an increase in interest
rates, changes in the actual or perceived volatility of securities markets and
the underlying securities and the remaining time to the options' expiration. The
value of the options may also be adversely affected if the market for the
options becomes less liquid or smaller.

An option is generally considered "covered" if a closed-end fund owns the
security underlying the call option or has an absolute and immediate right to
acquire that security without additional cash consideration (or, if required,
liquid cash or other assets are segregated by the fund) upon conversion or
exchange of other securities held by the fund. In certain cases, a call option
may also be considered covered if a fund holds a call option on the same
security as the call option written (sold) provided that certain conditions are
met. By writing (selling) covered call options, a fund generally seeks to
generate income, in the form of the premiums received for writing (selling) the
call options. Investment income paid by a fund to its shareholders (such as the
trust) may be derived primarily from the premiums it receives from writing
(selling) call options and, to a lesser extent, from the dividends and interest
it receives from the equity securities or other investments held in the fund's
portfolio and short-term gains thereon. Premiums from writing (selling) call
options and dividends and interest payments made by the securities in a fund's
portfolio can vary widely over time.

There can be no assurance that a liquid market for the options will exist
when a closed-end fund seeks to close out an option position. Reasons for the
absence of a liquid secondary market on an exchange include the following: (i)
there may be insufficient trading interest in certain options; (ii) restrictions
may be imposed by an exchange on opening transactions or closing transactions or
both; (iii) trading halts, suspensions or other restrictions may be imposed with
respect to particular classes or series of options; (iv) unusual or unforeseen
of an exchange or The Options Clearing Corporation ("OCC") may not at all times
be adequate to handle current trading volume; or (vi) one or more exchanges
could, for economic or other reasons, decide or be compelled at some future date
to discontinue the trading of options (or a particular class or series of
options). If trading were discontinued, the secondary market on that exchange
(or in that class or series of options) would cease to exist. However,
outstanding options on that exchange that had been issued by the OCC as a result
of trades on that exchange would continue to be exercisable in accordance with
their terms. A fund's ability to terminate over-the-counter options is more
limited than with exchange-traded options and may involve the risk that broker-
dealers participating in such transactions will not fulfill their obligations.
If a fund were unable to close out a covered call option that it had written
(sold) on a security, it would not be able to sell the underlying security
unless the option expired without exercise.

The hours of trading for options may not conform to the hours during which
the underlying securities are traded. To the extent that the options markets
close before the markets for the underlying securities, significant price and
rate movements can take place in the

-24-

underlying markets that cannot be reflected in the options markets.
Additionally, the exercise price of an option may be adjusted downward before
the option's expiration as a result of the occurrence of certain corporate
events affecting the underlying equity security, such as extraordinary
dividends, stock splits, merger or other extraordinary distributions or events.
In certain circumstances, a reduction in the exercise price of an option could
reduce a fund's capital appreciation potential on the underlying security.

To the extent that a fund purchases options pursuant to a hedging strategy,
the fund will be subject to the following additional risks. If a put or call
option purchased by a fund is not sold when it has remaining value, and if the
market price of the underlying security remains equal to or greater than the
exercise price (in the case of a put), or remains less than or equal to the
exercise price (in the case of a call), the fund will lose its entire investment
in the option. Also, where a put or call option on a particular security is
purchased to hedge against price movements in a related security, the price of
the put or call option may move more or less than the price of the related
security. If restrictions on exercise were imposed, a fund might be unable to
exercise an option it had purchased. If a fund were unable to close out an
option that it had purchased on a security, it would have to exercise the option
in order to realize any profit or the option may expire worthless.

The writing (selling) and purchase of options is a highly specialized
activity which involves investment techniques and risks different from those
associated with ordinary portfolio securities transactions. The successful use
of options depends in part on the ability of a fund's adviser to predict future
price fluctuations and, for hedging transactions, the degree of correlation
between the options and securities or currency markets.

ADDITIONAL DEPOSITS. The trust agreement authorizes the sponsor to
increase the size of a trust and the number of units thereof by the deposit of
additional securities, or cash (including a letter of credit or the equivalent)
with instructions to purchase additional securities, in such trust and the
issuance of a corresponding number of additional units. In connection with
these deposits, existing and new investors may experience a dilution of their
investments and a reduction in their anticipated income because of fluctuations
in the prices of the securities between the time of the deposit and the purchase
of the securities and because a trust will pay the associated brokerage fees and
other acquisition costs.

ADMINISTRATION OF THE TRUST

DISTRIBUTIONS TO UNITHOLDERS. Income received by a trust is credited by
the trustee to the Income Account for the trust. All other receipts are
credited by the trustee to a separate Capital Account for the trust. The
trustee will normally distribute any income received by a trust on each
distribution date or shortly thereafter to unitholders of record on the
preceding record date. The trust generally pays distributions from its Income
Account (pro-rated on an annual basis) along with any excess balance from the
Capital Account on each monthly distribution date to unitholders of record on
the preceding record date as described in greater detail below. All
distributions will be net of applicable expenses. The amount of your
distributions will vary from time to time as companies change their dividends or
trust expenses change. The trust will also generally make required
distributions or distributions to avoid imposition of tax at the end of

-25-

each year if it has elected to be taxed as a "regulated investment company" for
federal tax purposes. Excess amounts from the Capital Account of a trust, if
any, will be distributed at least annually to the unitholders then of record.
Proceeds received from the disposition of any of the securities after a record
date and prior to the following distribution date will be held in the Capital
Account and not distributed until the next distribution date applicable to the
Capital Account. The trustee shall not be required to make a distribution from
the Capital Account unless the cash balance on deposit therein available for
distribution shall be sufficient to distribute at least $1.00 per 100 units.
The trustee is not required to pay interest on funds held in the Capital or
Income Accounts (but may itself earn interest thereon and therefore benefits
from the use of such funds).

The distribution to the unitholders as of each record date will be made on
the following distribution date or shortly thereafter. When the trust receives
dividends from a portfolio security, the trustee credits the dividends to the
trust's accounts. In an effort to make relatively regular income distributions,
the trust's distribution from the Income Account on each distribution date to
each unitholder is equal to such unitholder's pro rata share of the cash balance
in the Income Account calculated on the basis of a fraction (the numerator of
which is one and the denominator of which is the total number of distribution
dates per year) of the estimated annual income to the trust for the ensuing
twelve months computed as of the close of business on the record date
immediately preceding such distribution after deduction of (1) the fees and
expenses then deductible pursuant to the trust agreement and (2) the trustee's
estimate of other expenses properly chargeable to the Income Account pursuant to
the trust agreement which have accrued as of such record date or are otherwise
properly attributable to the period to which such distribution relates. Because
the trust does not receive dividends from the portfolio securities at a constant
rate throughout the year, the trust's income distributions to unitholders may be
more or less than the amount credited to the trust accounts as of the record
date. In the event that the amount on deposit in the Income Account is not
sufficient for the payment of the amount intended to be distributed to
unitholders on the basis of the computation described above, the trustee is
authorized to advance its own funds and cause to be deposited in and credited to
the Income Account such amounts as may be required to permit payment of the
related distribution to be made as described above. In such an event, the
trustee shall be entitled to be reimbursed, without interest, out of income
payments received by the trust subsequent to the date of such advance. Any such
advance shall be reflected in the Income Account until repaid. A person will
become the owner of units, and thereby a unitholder of record, on the date of
settlement provided payment has been received. Persons who purchase units will
commence receiving distributions only after such person becomes a record owner.
Notification to the trustee of the transfer of units is the responsibility of
the purchaser, but in the normal course of business the selling broker-dealer
provides such notice.

The trustee will periodically deduct from the Income Account of a trust
and, to the extent funds are not sufficient therein, from the Capital Account of
a trust amounts necessary to pay the expenses of the trust. The trustee also
may withdraw from said accounts such amounts, if any, as it deems necessary to
establish a reserve for any governmental charges payable out of a trust.
Amounts so withdrawn shall not be considered a part of a trust's assets until
such time as the trustee shall return all or any part of such amounts to the
appropriate accounts. In addition, the

-26-

trustee may withdraw from the Income and Capital Accounts of a trust such
amounts as may be necessary to cover redemptions of units.

DISTRIBUTION REINVESTMENT. Unitholders may reinvest distributions into
additional units of their trust without a sales fee. The trust will pay any
deferred sales fee and creation and development fee per unit regardless of any
sales fee discounts. However, if you are eligible to receive a discount such
that the sales fee you must pay is less than the applicable deferred sales fee
and creation and development fee, you will be credited the difference between
your sales fee and the deferred sales fee and the creation and development fee
at the time you buy your units. Accordingly, if you reinvest distributions into
additional units of your trust, you will be credited the amount of any remaining
deferred sales fee and creation and development fee on such units at the time of
reinvestment.

STATEMENTS TO UNITHOLDERS. With each distribution, the trustee will
furnish to each unitholder a statement of the amount of income and the amount of
other receipts, if any, which are being distributed, expressed in each case as a
dollar amount per unit.

The accounts of a trust are required to be audited annually, at the related
trust's expense, by independent public accountants designated by the sponsor,
unless the sponsor determines that such an audit would not be in the best
interest of the unitholders of the trust. The accountants' report will be
furnished by the trustee to any unitholder upon written request. Within a
reasonable period of time after the end of each calendar year, the trustee shall
furnish to each person who at any time during the calendar year was a unitholder
of a trust a statement, covering the calendar year, setting forth for the trust:

(A) As to the Income Account:

(1) the amount of income received on the securities (including income
received as a portion of the proceeds of any disposition of
securities);

(2) the amounts paid for purchases of replacement securities or for
purchases of securities otherwise pursuant to the trust
agreement, if any, and for redemptions;

(3) the deductions, if any, from the Income Account for payment into
the Reserve Account;

(4) the deductions for applicable taxes and fees and expenses of the
trustee, the depositor, the evaluator, the supervisor, counsel,
auditors and any other expenses paid by the trust;

(5) the amounts reserved for purchases of contract securities, for
purchases made pursuant to replace failed contract securities or
for purchases of securities otherwise pursuant to the trust
agreement, if any;

-27-

(6) the deductions for payment of the depositor's expenses of
maintaining the registration of the trust units, if any;

(7) the aggregate distributions to unitholders; and

(8) the balance remaining after such deductions and distributions,
expressed both as a total dollar amount and as a dollar amount
per unit outstanding on the last business day of such calendar
year;

(B) As to the Capital Account:

(1) the net proceeds received due to sale, maturity, redemption,
liquidation or disposition of any of the securities, excluding
any portion thereof credited to the Income Account;

(2) the amount paid for purchases of replacement securities or for
purchases of securities otherwise pursuant to the trust
agreement, if any, and for redemptions;

(3) the deductions, if any, from the Capital Account for payments
into the Reserve Account;

(4) the deductions for payment of applicable taxes and fees and
expenses of the trustee, the depositor, the evaluator, the
supervisor, counsel, auditors and any other expenses paid by the
trust;

(5) the deductions for payment of the depositor's expenses of
organizing the trust;

(6) the amounts reserved for purchases of contract securities, for
purchases made pursuant to replace failed contract securities or
for purchases of securities otherwise pursuant to the trust
agreement, if any;

(7) the deductions for payment of deferred sales fee and creation and
development fee, if any;

(8) the deductions for payment of the depositor's expenses of
maintaining the registration of the trust units, if any;

(9) the aggregate distributions to unitholders; and

(10) the balance remaining after such distributions and deductions,
expressed both as a total dollar amount and as a dollar amount
per unit outstanding on the last business day of such calendar
year; and

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(1) a list of the securities held as of the last business day of such
calendar year and a list which identifies all securities sold or
other securities acquired during such calendar year, if any;

(2) the number of units outstanding on the last business day of such
calendar year;

(3) the unit value based on the last trust evaluation of such trust
made during such calendar year; and

(4) the amounts actually distributed during such calendar year from
the Income and Capital Accounts, separately stated, expressed
both as total dollar amounts and as dollar amounts per unit
outstanding on the record dates for such distributions.

RIGHTS OF UNITHOLDERS. A unitholder may at any time tender units to the
trustee for redemption. The death or incapacity of any unitholder will not
operate to terminate a trust nor entitle legal representatives or heirs to claim
an accounting or to bring any action or proceeding in any court for partition or
winding up of a trust. No unitholder shall have the right to control the
operation and management of a trust in any manner, except to vote with respect
to the amendment of the trust agreement or termination of a trust.

AMENDMENT AND TERMINATION. The trust agreement may be amended from time to
time by the sponsor and trustee or their respective successors, without the
consent of any of the unitholders, (i) to cure any ambiguity or to correct or
supplement any provision which may be defective or inconsistent with any other
provision contained in the trust agreement, (ii) to make such other provision in
regard to matters or questions arising under the trust agreement as shall not
materially adversely affect the interests of the unitholders or (iii) to make
such amendments as may be necessary (a) for the trust to continue to qualify as
a regulated investment company for federal income tax purposes if the trust has
elected to be taxed as such under the United States Internal Revenue Code of
1986, as amended, or (b) to prevent the trust from being deemed an association
taxable as a corporation for federal income tax purposes if the trust has not
elected to be taxed as a regulated investment company under the United States
Internal Revenue Code of 1986, as amended. The trust agreement may not be
amended, however, without the consent of all unitholders then outstanding, so as
(1) to permit, except in accordance with the terms and conditions thereof, the
acquisition hereunder of any securities other than those specified in the
schedules to the trust agreement or (2) to reduce the percentage of units the
holders of which are required to consent to certain of such amendments. The
trust agreement may not be amended so as to reduce the interest in a trust
represented by units without the consent of all affected unitholders. Except
for the amendments, changes or modifications described above, neither the
sponsor nor the trustee may consent to any other amendment, change or
modification of the trust agreement without the giving of notice and the
obtaining of the approval or consent of unitholders representing at least 66
2/3% of the units then outstanding of the affected trust. No amendment may
reduce the aggregate percentage of units the holders of which are required to
consent to any amendment, change or modification of the trust agreement without
the consent of the unitholders of all of the units then outstanding of the
affected trust and in no event may any

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amendment be made which would (1) alter the rights to the unitholders as against
each other, (2) provide the trustee with the power to engage in business or
investment activities other than as specifically provided in the trust
agreement, (3) adversely affect the tax status of the trust for federal income
tax purposes or result in the units being deemed to be sold or exchanged for
federal income tax purposes or (4) unless the trust has elected to be taxed as a
regulated investment company for federal income tax purposes, result in a
variation of the investment of unitholders in the trust. The trustee will
notify unitholders of the substance of any such amendment.

The trust agreement provides that a trust shall terminate upon the
liquidation, redemption or other disposition of the last of the securities held
in the trust but in no event is it to continue beyond the mandatory termination
date. If the value of a trust shall be less than the applicable minimum value
stated in the prospectus (generally 40% of the total value of securities
deposited in the trust during the initial offering period), the trustee may, in
its discretion, and shall, when so directed by the sponsor, terminate the trust.
A trust may be terminated at any time by the holders of units representing 66
2/3% of the units thereof then outstanding. In addition, the sponsor may
terminate a trust if it is based on a security index and the index is no longer
maintained. A trust will be liquidated by the trustee in the event that a
sufficient number of units of the trust not yet sold are tendered for redemption
by the sponsor, so that the net worth of the trust would be reduced to less than
40% of the value of the securities at the time they were deposited in the trust.
If a trust is liquidated because of the redemption of unsold units by the
sponsor, the sponsor will refund to each purchaser of units the entire sales fee
paid by such purchaser.

Beginning nine business days prior to, but no later than, the scheduled
termination date described in the prospectus, the trustee may begin to sell all
of the remaining underlying securities on behalf of unitholders in connection
with the termination of the trust. The sponsor may assist the trustee in these
sales and receive compensation to the extent permitted by applicable law. The
sale proceeds will be net of any incidental expenses involved in the sales.

The sponsor will generally instruct the trustee to sell the securities as
quickly as practicable during the termination proceedings without in its
judgment materially adversely affecting the market price of the securities, but
it is expected that all of the securities will in any event be disposed of
within a reasonable time after a trust's termination. The sponsor does not
anticipate that the period will be longer than one month, and it could be as
short as one day, depending on the liquidity of the securities being sold. The
liquidity of any security depends on the daily trading volume of the security
and the amount that the sponsor has available for sale on any particular day.
Of course, no assurances can be given that the market value of the securities
will not be adversely affected during the termination proceedings.

Approximately thirty days prior to termination of a trust, the trustee will
notify unitholders of the termination and provide a form allowing qualifying
unitholders to elect an in-kind distribution. A unitholder who owns the minimum
number of units described in the prospectus may request an in-kind distribution
from the trustee instead of cash. The trustee will make an in-kind distribution
through the distribution of each of the securities of the trust in book entry
form to the account of the unitholder's bank or broker-dealer at Depository
Trust Company. The unitholder will be entitled to receive whole shares of each
of the securities comprising the

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portfolio of a trust and cash from the Capital Account equal to the fractional
shares to which the unitholder is entitled. The trustee may adjust the number
of shares of any security included in a unitholder's in-kind distribution to
facilitate the distribution of whole shares. The sponsor may terminate the in-
kind distribution option at any time upon notice to the unitholders. Special
federal income tax consequences will result if a unitholder requests an in-kind
distribution.

Within a reasonable period after termination, the trustee will sell any
securities remaining in a trust and, after paying all expenses and charges
incurred by the trust, will distribute to unitholders thereof their pro rata
share of the balances remaining in the Income and Capital Accounts of the trust.

The sponsor may, but is not obligated to, offer for sale units of a
subsequent series of a trust at approximately the time of the mandatory
termination date. If the sponsor does offer such units for sale, unitholders
may be given the opportunity to purchase such units at a public offering price
that includes a reduced sales fee. There is, however, no assurance that units
of any new series of a trust will be offered for sale at that time, or if
offered, that there will be sufficient units available for sale to meet the
requests of any or all unitholders.

THE TRUSTEE. The trustee is The Bank of New York Mellon, a trust company
organized under the laws of New York. The Bank of New York Mellon has its
principal unit investment trust division offices at 2 Hanson Place, 12th Floor,
Brooklyn, New York 11217, (800) 848-6468. The Bank of New York Mellon is subject
to supervision and examination by the Superintendent of Banks of the State of
New York and the Board of Governors of the Federal Reserve System, and its
deposits are insured by the Federal Deposit Insurance Corporation to the extent
permitted by law.

The trustee, whose duties are ministerial in nature, has not participated
in selecting the portfolio of any trust. In accordance with the trust
agreement, the trustee shall keep records of all transactions at its office.
Such records shall include the name and address of, and the number of units held
by, every unitholder of a trust. Such books and records shall be open to
inspection by any unitholder at all reasonable times during usual business
hours. The trustee shall make such annual or other reports as may from time to
time be required under any applicable state or federal statute, rule or
regulation. The trustee shall keep a certified copy or duplicate original of
the trust agreement on file in its office available for inspection at all
reasonable times during usual business hours by any unitholder, together with a
current list of the securities held in each trust. Pursuant to the trust
agreement, the trustee may employ one or more agents for the purpose of custody
and safeguarding of securities comprising a trust.

Under the trust agreement, the trustee or any successor trustee may resign
and be discharged of a trust created by the trust agreement by executing an
instrument in writing and filing the same with the sponsor.

The trustee or successor trustee must mail a copy of the notice of
resignation to all unitholders then of record, not less than sixty days before
the date specified in such notice when such resignation is to take effect. The
sponsor upon receiving notice of such resignation is obligated to appoint a
successor trustee promptly. If, upon such resignation, no successor trustee

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has been appointed and has accepted the appointment within thirty days after
notification, the retiring trustee may apply to a court of competent
jurisdiction for the appointment of a successor. In case at any time the trustee
shall not meet the requirements set forth in the trust agreement, or shall
become incapable of acting, or if a court having jurisdiction in the premises
shall enter a decree or order for relief in respect of the trustee in an
involuntary case, or the trustee shall commence a voluntary case, under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or any receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) for the trustee or for any substantial part of its
property shall be appointed, or the trustee shall generally fail to pay its
debts as they become due, or shall fail to meet such written standards for the
trustee's performance as shall be established from time to time by the sponsor,
or if the sponsor determines in good faith that there has occurred either (1) a
material deterioration in the creditworthiness of the trustee or (2) one or more
grossly negligent acts on the part of the trustee with respect to a trust, the
sponsor, upon sixty days' prior written notice, may remove the trustee and
appoint a successor trustee, as hereinafter provided, by written instrument, in
duplicate, one copy of which shall be delivered to the trustee so removed and
one copy to the successor trustee. Notice of such removal and appointment shall
be mailed to each unitholder by the sponsor. Upon execution of a written
acceptance of such appointment by such successor trustee, all the rights,
powers, duties and obligations of the original trustee shall vest in the
successor. The trustee must be a corporation organized under the laws of the
United States, or any state thereof, be authorized under such laws to exercise
trust powers and have at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.

THE SPONSOR. The sponsor of the trust is Advisors Asset Management, Inc.
acting through its unit investment trust division. The sponsor is a broker-
dealer specializing in providing services to broker-dealers, registered
representatives, investment advisers and other financial professionals. The
sponsor's headquarters are located at 18925 Base Camp Road, Monument, Colorado
80132. You can contact the unit investment trust division at 8100 East 22nd
Street North, Building 800, Suite 102, Wichita, Kansas 67226 or by using the
contacts listed on the back cover of the prospectus. The sponsor is a registered
broker-dealer and investment adviser and a member of the Financial Industry
Regulatory Authority, Inc. (FINRA) and the Securities Investor Protection
Corporation (SIPC), and a registrant of the Municipal Securities Rulemaking
Board (MSRB).

If at any time the sponsor shall fail to perform any of its duties under
the trust agreement or shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or shall have its affairs taken over by public
authorities, then the trustee may (a) appoint a successor sponsor at rates of
compensation deemed by the trustee to be reasonable and not exceeding such
reasonable amounts as may be prescribed by the Securities and Exchange
Commission, (b) terminate the trust agreement and liquidate any trust as
provided therein, or (c) continue to act as trustee without terminating the
trust agreement.

THE EVALUATOR AND SUPERVISOR. Advisors Asset Management, Inc., the
sponsor, also serves as evaluator and supervisor. The evaluator and supervisor
may resign or be removed by the sponsor and trustee in which event the sponsor
or trustee is to use its best efforts to appoint a satisfactory successor. Such
resignation or removal shall become effective upon acceptance of appointment by
the successor evaluator. If upon resignation of the evaluator no successor has

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accepted appointment within thirty days after notice of resignation, the
evaluator may apply to a court of competent jurisdiction for the appointment of
a successor. Notice of such resignation or removal and appointment shall be
mailed by the trustee to each unitholder.

LIMITATIONS ON LIABILITY. The sponsor, evaluator, and supervisor are
liable for the performance of their obligations arising from their
responsibilities under the trust agreement but will be under no liability to the
unitholders for taking any action or refraining from any action in good faith
pursuant to the trust agreement or for errors in judgment, except in cases of
its own gross negligence, bad faith or willful misconduct or its reckless
disregard for its duties thereunder. The sponsor shall not be liable or
responsible in any way for depreciation or loss incurred by reason of the sale
of any securities.

The trust agreement provides that the trustee shall be under no liability
for any action taken in good faith in reliance upon prima facie properly
executed documents or for the disposition of moneys, securities or certificates
except by reason of its own gross negligence, bad faith or willful misconduct,
or its reckless disregard for its duties under the trust agreement, nor shall
the trustee be liable or responsible in any way for depreciation or loss
incurred by reason of the sale by the trustee of any securities. In the event
that the sponsor shall fail to act, the trustee may act and shall not be liable
for any such action taken by it in good faith. The trustee shall not be
personally liable for any taxes or other governmental charges imposed upon or in
respect of the securities or upon the interest thereof. In addition, the trust
agreement contains other customary provisions limiting the liability of the
trustee.

The trustee and unitholders may rely on any evaluation furnished by the
evaluator and shall have no responsibility for the accuracy thereof. The trust
agreement provides that the determinations made by the evaluator shall be made
in good faith upon the basis of the best information available to it, provided,
however, that the evaluator shall be under no liability to the trustee or
unitholders for errors in judgment, but shall be liable for its gross
negligence, bad faith or willful misconduct or its reckless disregard for its
obligations under the trust agreement.

EXPENSES OF THE TRUST. The sponsor will not charge a trust any fees for
services performed as sponsor. The sponsor will receive a portion of the sale
commissions paid in connection with the purchase of units and will share in
profits, if any, related to the deposit of securities in the trust.

The sponsor may receive a fee from your trust for creating and developing
the trust, including determining the trust's objectives, policies, composition
and size, selecting service providers and information services and for providing
other similar administrative and ministerial functions. The amount of this
"creation and development fee" is set forth in the prospectus. The trustee will
deduct this amount from your trust's assets as of the close of the initial
offering period. No portion of this fee is applied to the payment of
distribution expenses or as compensation for sales efforts. This fee will not be
deducted from proceeds received upon a repurchase, redemption or exchange of
units before the close of the initial public offering period.

The trustee receives for its services that fee set forth in the prospectus.
The trustee's fee which is calculated and paid monthly is based on the total
number of units of the related trust

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outstanding as of January 1 for any annual period, except during the initial
offering period the fee will be based on the units outstanding at the end of
each month. The trustee benefits to the extent there are funds for future
distributions, payment of expenses and redemptions in the Capital and Income
Accounts since these Accounts are non-interest bearing and the amounts earned by
the trustee are retained by the trustee. Part of the trustee's compensation for
its services to a trust is expected to result from the use of these funds.

The supervisor will charge a trust a surveillance fee for services
performed for the trust in an amount not to exceed that amount set forth in the
prospectus but in no event will such compensation, when combined with all
compensation received from other unit investment trusts for which the sponsor
both acts as sponsor and provides portfolio surveillance, exceed the aggregate
cost to the sponsor of providing such services. Such fee shall be based on the
total number of units of the related trust outstanding as of January 1 for any
annual period, except during the initial offering period the fee will be based
on the units outstanding at the end of each month.

For evaluation of the securities in a trust, the evaluator shall receive an
evaluation fee in an amount not to exceed that amount set forth in the
prospectus but in no event will such compensation, when combined with all
compensation from other unit investment trusts for which the sponsor acts as
sponsor and provides evaluation services, exceed the aggregate cost of providing
such services. Such fee shall be based on the total number of units of the
related trust outstanding as of January 1 for any annual period, except during
the initial offering period the fee will be based on the units outstanding at
the end of each month.

For providing bookkeeping and administrative services to a trust, the
sponsor shall receive an administration fee in an amount not to exceed that
amount set forth in the prospectus but in no event will such compensation, when
combined with all compensation from other unit investment trusts for which the
sponsor acts as sponsor and provides evaluation services, exceed the aggregate
cost of providing such services. Such fee shall be based on the total number of
units of the related trust outstanding as of January 1 for any annual period,
except during the initial offering period the fee will be based on the units
outstanding at the end of each month.

The trustee's fee, sponsor's fee for providing bookkeeping and
administrative services to the trust, supervisor's fee and evaluator's fee are
deducted from the Income Account of the related trust to the extent funds are
available and then from the Capital Account. Each such fee (other than any
creation and development fee) may be increased without approval of unitholders
by amounts not exceeding a proportionate increase in the Consumer Price Index or
any equivalent index substituted therefor.

The following additional charges are or may be incurred by the trust:
(a) fees for the trustee's extraordinary services; (b) expenses of the trustee
(including legal and auditing expenses and reimbursement of the cost of advances
to the trust for payment of expenses and distributions, but not including any
fees and expenses charged by an agent for custody and safeguarding of
securities) and of counsel, if any; (c) various governmental charges;
(d) expenses and costs of any action taken by the trustee to protect the trust
or the rights and interests of the unitholders; (e) indemnification of the
trustee for any loss, liability or expense incurred by it in

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the administration of the trust not resulting from negligence, bad faith or
willful misconduct on its part or its reckless disregard of its obligations
under the trust agreement; (f) indemnification of the sponsor for any loss,
liability or expense incurred in acting in that capacity without gross
negligence, bad faith or willful misconduct or its reckless disregard for its
obligations under the trust agreement; and (g) expenditures incurred in
contacting unitholders upon termination of the trust. The fees and expenses set
forth herein are payable out of a trust and, when owing to the trustee, are
secured by a lien on the trust. If the balances in the Income and Capital
Accounts are insufficient to provide for amounts payable by the trust, the
trustee has the power to sell securities to pay such amounts. These sales may
result in capital gains or losses to unitholders. A trust may pay the costs of
updating its registration statement each year.

PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION

When a trust sells securities, the composition and diversity of the
securities in the trust may be altered. In order to obtain the best price for a
trust, it may be necessary for the sponsor to specify minimum amounts in which
blocks of securities are to be sold. In effecting purchases and sales of a
trust's portfolio securities, the sponsor may direct that orders be placed with
and brokerage commissions be paid to brokers, including brokers which may be
affiliated with the trust, the sponsor or dealers participating in the offering
of units.

PURCHASE, REDEMPTION AND PRICING OF UNITS

PUBLIC OFFERING PRICE. Units of a trust are offered at the public offering
price thereof. The public offering price per unit is equal to the net asset
value per unit plus organization costs plus the applicable sales fee referred to
in the prospectus. The initial sales fee is equal to the difference between the
maximum sales fee and the sum of the remaining deferred sales fee and the total
creation and development fee. The sales fee as a percentage of the public
offering price and the net amount invested is set forth in the prospectus. The
deferred sales fee is a fixed dollar amount and will be collected in
installments as described in the prospectus. The creation and development fee is
a fixed dollar amount and will be collected at the end of the initial offering
period as described in the prospectus. Units purchased after the initial
deferred sales fee payment will be subject to the remaining deferred sales fee
payments. Units sold or redeemed prior to such time as the entire applicable
deferred sales fee has been collected will be assessed the remaining deferred
sales fee at the time of such sale or redemption. Units sold or redeemed prior
to such time as the entire applicable creation and development fee has been
collected will not be assessed the remaining creation and development fee at the
time of such sale or redemption. During the initial offering period, a portion
of the public offering price includes an amount of securities to pay for all or
a portion of the costs incurred in establishing a trust. These costs include
the cost of preparing the registration statement, the trust indenture and other
closing documents, registering units with the Securities and Exchange Commission
and states, the initial audit of the trust portfolio, legal fees and the initial
fees and expenses of the trustee. These costs will be deducted from a trust as
of the end of the initial offering period or after six months, if earlier.
Certain broker-dealers may charge a transaction fee for processing unit
purchases.

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As indicated above, the initial public offering price of the units was
established by dividing the aggregate underlying value of the securities by the
number of units outstanding. Such price determination as of the opening of
business on the date a trust was created was made on the basis of an evaluation
of the securities in the trust prepared by the evaluator. After the opening of
business on this date, the evaluator will appraise or cause to be appraised
daily the value of the underlying securities as of the close of regular trading
on the New York Stock Exchange on days the New York Stock Exchange is open and
will adjust the public offering price of the units commensurate with such
valuation. Such public offering price will be effective for all orders received
at or prior to the close of regular trading on the New York Stock Exchange on
each such day as discussed in the prospectus. Orders received by the trustee,
sponsor or authorized financial professionals for purchases, sales or
redemptions after that time, or on a day when the New York Stock Exchange is
closed, will be held until the next determination of price as discussed in the
prospectus.

Had units of a trust been available for sale at the close of business on
the business day before the inception date of the trust, the public offering
price would have been as shown under "Essential Information" in the prospectus.
The public offering price per unit of a trust on the date of the prospectus or
on any subsequent date will vary from the amount stated under "Essential
Information" in the prospectus in accordance with fluctuations in the prices of
the underlying securities. Net asset value per unit is determined by dividing
the value of a trust's portfolio securities, cash and other assets, less all
liabilities, by the total number of units outstanding. The portfolio securities
are valued by the evaluator as follows: If the security is listed on a national
securities exchange, the evaluation will generally be based on the last sale
price on the exchange (unless the evaluator deems the price inappropriate as a
basis for evaluation). If the security is not so listed or, if so listed and
the principal market for the security is other than on the exchange, the
evaluation will generally be made by the evaluator in good faith based on an
appraisal of the fair value of the securities using recognized pricing methods.

The foregoing evaluations and computations shall be made as of the close of
regular trading on the New York Stock Exchange, on each business day commencing
with the trust's inception date of the securities, effective for all sales made
during the preceding 24-hour period.

Although payment is normally made three business days following the order
for purchase, payments may be made prior thereto. A person will become the
owner of units on the date of settlement provided payment has been received.
Cash, if any, made available to the sponsor prior to the date of settlement for
the purchase of units may be used in the sponsor's business and may be deemed to
be a benefit to the sponsor, subject to the limitations of the Securities
Exchange Act of 1934.

PUBLIC DISTRIBUTION OF UNITS. The sponsor intends to qualify the units for
sale in a number of states. Units will be sold through dealers who are members
of the Financial Industry Regulatory Authority, Inc. and through others. Sales
may be made to or through dealers at prices which represent discounts from the
public offering price as set forth in the prospectus. Certain commercial banks
may be making units available to their customers on an agency basis. The
sponsor reserves the right to change the discounts from time to time.

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We currently provide, at our own expense and out of our own profits,
additional compensation and benefits to broker-dealers who sell units of this
trust and our other products. This compensation is intended to result in
additional sales of our products and/or compensate broker-dealers and financial
advisors for past sales. A number of factors are considered in determining
whether to pay these additional amounts. Such factors may include, but are not
limited to, the level or type of services provided by the intermediary, the
level or expected level of sales of our products by the intermediary or its
agents, the placing of our products on a preferred or recommended product list
and access to an intermediary's personnel. We may make these payments for
marketing, promotional or related expenses, including, but not limited to,
expenses of entertaining retail customers and financial advisors, advertising,
sponsorship of events or seminars, obtaining information about the breakdown of
unit sales among an intermediary's representations or offices, obtaining shelf
space in broker-dealer firms and similar activities designed to promote the sale
of our products. We make such payments to a substantial majority of
intermediaries that sell our products. We may also make certain payments to, or
on behalf of, intermediaries to defray a portion of their costs incurred for the
purpose of facilitating unit sales, such as the costs of developing or
purchasing trading systems to process unit trades. Payments of such additional
compensation described in this paragraph and the volume concessions described
above, some of which may be characterized as "revenue sharing," may create an
incentive for financial intermediaries and their agents to sell or recommend our
products, including this trust, over other products. These arrangements will not
change the price you pay for your units. The sponsor reserves the right to
reject, in whole or in part, any order for the purchase of units.

The sponsor reserves the right to reject, in whole or in part, any order
for the purchase of units.

PROFITS OF SPONSOR. The sponsor will receive gross sales fees equal to the
percentage of the offering price of the units of such trusts stated in the
prospectus and will pay a portion of such sales fees to dealers and agents. In
addition, the sponsor may realize a profit or a loss resulting from the
difference between the purchase prices of the securities to the sponsor and the
cost of such securities to a trust. The sponsor may also realize profits or
losses with respect to securities deposited in a trust which were acquired from
underwriting syndicates of which the sponsor was a member. An underwriter or
underwriting syndicate purchases securities from the issuer on a negotiated or
competitive bid basis, as principal, with the motive of marketing such
securities to investors at a profit. The sponsor may realize additional profits
or losses during the initial offering period on unsold units as a result of
changes in the daily evaluation of the securities in a trust.

MARKET FOR UNITS. After the initial offering period, while not obligated
to do so, the sponsor may, subject to change at any time, maintain a market for
units of the trust offered hereby and to continuously offer to purchase said
units at the net asset value determined by the evaluator, provided that the
repurchase price will not be reduced by any remaining creation and development
fee or organization costs during the initial offering period. While the sponsor
may repurchase units from time to time, it does not currently intend to maintain
an active secondary market for units. Unitholders who wish to dispose of their
units should inquire of their broker as to current market prices in order to
determine whether there is in existence any price in excess of

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the redemption price and, if so, the amount thereof. Unitholders who sell or
redeem units prior to such time as the entire deferred sales fee on such units
has been collected will be assessed the amount of the remaining deferred sales
fee at the time of such sale or redemption. Unitholders who sell or redeem units
prior to such time as the entire creation and development fee on such units has
been collected will not be assessed the amount of the remaining creation and
development fee at the time of such sale or redemption. The offering price of
any units resold by the sponsor will be in accord with that described in the
currently effective prospectus describing such units. Any profit or loss
resulting from the resale of such units will belong to the sponsor. If the
sponsor decides to maintain a secondary market, it may suspend or discontinue
purchases of units of the trust if the supply of units exceeds demand, or for
other business reasons.

REDEMPTION. A unitholder who does not dispose of units in the secondary
market described above may cause units to be redeemed by the trustee by making a
written request to the trustee at its unit investment trust division office.
Unitholders must sign the request exactly as their names appear on the records
of the trustee. Additional documentation may be requested, and a signature
guarantee is always required, from corporations, executors, administrators,
trustees, guardians or associations. The signatures must be guaranteed by a
participant in the Securities Transfer Agents Medallion Program ("STAMP") or
such other signature guaranty program in addition to, or in substitution for,
STAMP, as may be accepted by the trustee.

Redemption shall be made by the trustee no later than the seventh day
following the day on which a tender for redemption is received (the "Redemption
Date") by payment of cash equivalent to the redemption price, determined as set
forth below under "Computation of Redemption Price," as of the close of regular
trading on the New York Stock Exchange next following such tender, multiplied by
the number of units being redeemed. Any units redeemed shall be canceled and
any undivided fractional interest in the related trust extinguished. The price
received upon redemption might be more or less than the amount paid by the
unitholder depending on the value of the securities in the trust at the time of
redemption. Unitholders who sell or redeem units prior to such time as the
entire deferred sales fee on such units has been collected will be assessed the
amount of the remaining deferred sales fee at the time of such sale or
redemption. Unitholders who sell or redeem units prior to such time as the
entire creation and development fee on such units has been collected will not be
assessed the amount of the remaining creation and development fee at the time of
such sale or redemption. Certain broker-dealers may charge a transaction fee
for processing redemption requests.

Under regulations issued by the Internal Revenue Service, the trustee is
required to withhold a specified percentage of the principal amount of a unit
redemption if the trustee has not been furnished the redeeming unitholder's tax
identification number in the manner required by such regulations. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the unitholder only when filing a tax return. Under normal circumstances, the
trustee obtains the unitholder's tax identification number from the selling
broker. However, any time a unitholder elects to tender units for redemption,
such unitholder should make sure that the trustee has been provided a certified
tax identification number in order to avoid this possible "back-up withholding."
In the event the trustee has not been previously provided such number, one must
be provided at the time redemption is requested. Any amounts paid on redemption
representing interest shall be withdrawn from the Income Account of a trust to
the extent that

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funds are available for such purpose. All other amounts paid on redemption
shall be withdrawn from the Capital Account for a trust.

Unitholders tendering units for redemption may request a distribution in
kind (a "Distribution In Kind") from the trustee in lieu of cash redemption of
an amount and value of securities per unit equal to the redemption price per
unit as determined as of the evaluation time next following the tender, provided
that the tendering unitholder meets the requirements stated in the prospectus
and the unitholder has elected to redeem at least thirty days prior to the
termination of the trust. If the unitholder meets these requirements, a
Distribution In Kind will be made by the trustee through the distribution of
each of the securities of the trust in book entry form to the account of the
unitholder's bank or broker-dealer at Depository Trust Company. The tendering
unitholder shall be entitled to receive whole shares of each of the securities
comprising the portfolio of the trust and cash from the Capital Account equal to
the fractional shares to which the tendering unitholder is entitled. The
trustee shall make any adjustments necessary to reflect differences between the
redemption price of the units and the value of the securities distributed in
kind as of the date of tender. If funds in the Capital Account are insufficient
to cover the required cash distribution to the tendering unitholder, the trustee
may sell securities. The in kind redemption option may be terminated by the
sponsor at any time.

The trustee is empowered to sell securities in order to make funds
available for the redemption of units. To the extent that securities are sold
or redeemed in-kind, the size of a trust will be, and the diversity of a trust
may be, reduced but each remaining unit will continue to represent approximately
the same proportional interest in each security. Sales may be required at a
time when securities would not otherwise be sold and may result in lower prices
than might otherwise be realized. The price received upon redemption may be
more or less than the amount paid by the unitholder depending on the value of
the securities in the portfolio at the time of redemption.

The trustee is irrevocably authorized in its discretion, if the sponsor
does not elect to purchase any unit tendered for redemption, in lieu of
redeeming such units, to sell such units in the over-the-counter market for the
account of tendering unitholders at prices which will return to the unitholders
amounts in cash, net after brokerage commissions, transfer taxes and other
charges, equal to or in excess of the redemption price for such units. In the
event of any such sale, the trustee shall pay the net proceeds thereof to the
unitholders on the day they would otherwise be entitled to receive payment of
the redemption price.

The right of redemption may be suspended and payment postponed (1) for any
period during which the New York Stock Exchange is closed, other than customary
weekend and holiday closings, or during which (as determined by the Securities
and Exchange Commission) trading on the New York Stock Exchange is restricted;
(2) for any period during which an emergency exists as a result of which
disposal by the trustee of securities is not reasonably practicable or it is not
reasonably practicable to fairly determine the value of the underlying
securities in accordance with the trust agreement; or (3) for such other period
as the Securities and Exchange Commission may by order permit. The trustee is
not liable to any person in any way for any loss or damage which may result from
any such suspension or postponement.

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COMPUTATION OF REDEMPTION PRICE. The redemption price for units of each
trust is computed by the evaluator as of the evaluation time stated in the
prospectus next occurring after the tendering of a unit for redemption and on
any other business day desired by it, by:

A. Adding: (1) the cash on hand in the trust other than cash deposited in the
trust to purchase securities not applied to the purchase of such securities
and (2) the aggregate value of each issue of the securities held in the
trust as determined by the evaluator as described above;

B. Deducting therefrom (1) amounts representing any applicable taxes or
governmental charges payable out of the trust and for which no deductions
have been previously made for the purpose of additions to the Reserve
Account; (2) an amount representing estimated accrued expenses, including
but not limited to fees and expenses of the trustee (including legal and
auditing fees), the evaluator, the sponsor and counsel, if any; (3) cash
held for distribution to unitholders of record as of the business day prior
to the evaluation being made; and (4) other liabilities incurred by the
trust, provided that the redemption price will not be reduced by any
remaining creation and development fee or organization costs during the
initial offering period; and

C. Finally dividing the results of such computation by the number of units of
the trust outstanding as of the date thereof.

RETIREMENT PLANS. A trust may be suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other qualified retirement
plans. Generally, capital gains and income received under each of the foregoing
plans are deferred from Federal taxation. All distributions from such plans are
generally treated as ordinary income but may, in some cases, be eligible for
special income averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific tax laws
related thereto and should consult their attorneys or tax advisers with respect
to the establishment and maintenance of any such plan. Such plans are offered
by brokerage firms and other financial institutions. The trust will lower the
minimum investment requirement for IRA accounts. Fees and charges with respect
to such plans may vary.

OWNERSHIP OF UNITS. Ownership of units will not be evidenced by
certificates. Units may be purchased in denominations of one unit or any
multiple thereof, subject to the minimum investment requirement. Fractions of
units, if any, will be computed to three decimal places.

PERFORMANCE INFORMATION

Information contained in this Information Supplement or in the prospectus,
as it currently exists or as further updated, may also be included from time to
time in other prospectuses or in advertising material. Information on the
performance of a trust strategy or the actual performance of a trust may be
included from time to time in other prospectuses or advertising material and may
reflect sales fees and expenses of a trust. The performance of a trust may also
be compared to the performance of money managers as reported in SEI Fund
Evaluation Survey or of mutual funds as reported by Lipper Analytical Services
Inc. (which calculates total return

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using actual dividends on ex-dates accumulated for the quarter and reinvested at
quarter end), Money Magazine Fund Watch (which rates fund performance over a
specified time period after sales fee and assuming all dividends reinvested) or
Wiesenberger Investment Companies Service (which states fund performance
annually on a total return basis) or of the New York Stock Exchange Composite
Index, the American Stock Exchange Index (unmanaged indices of stocks traded on
the New York and American Stock Exchanges, respectively), the Dow Jones
Industrial Average (an index of 30 widely traded industrial common stocks) or
the Standard & Poor's 500 Index (an unmanaged diversified index of 500 stocks)
or similar measurement standards during the same period of time.

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CONTENTS OF REGISTRATION STATEMENT

This Registration Statement comprises the following:
The facing sheet
The prospectus and information supplement
The signatures
The consents of evaluator, independent auditors and legal counsel

The following exhibits:

1.1 Trust Agreement (to be filed by amendment).

1.1.1 Standard Terms and Conditions of Trust (to be filed by amendment).

1.2 Certificate of Amendment of Certificate of Incorporation and Certificate
of Merger of Advisors Asset Management, Inc. Reference is made to
Exhibit 1.2 to the Registration Statement on Form S-6 for Advisors
Disciplined Trust 647 (File No. 333-171079) as filed on January 6, 2011.

1.3 Bylaws of Advisors Asset Management, Inc. Reference is made to
Exhibit 1.3 to the Registration Statement on Form S-6 for Advisors
Disciplined Trust 647 (File No. 333-171079) as filed on January 6, 2011.

1.5 Form of Dealer Agreement. Reference is made to Exhibit 1.5 to the
Registration Statement on Form S-6 for Advisors Disciplined Trust 262
(File No. 333-150575) as filed of June 17, 2008.

2.2 Form of Code of Ethics. Reference is made to Exhibit 2.2 to the
Registration Statement on Form S-6 for Advisor's Disciplined Trust 73
(File No. 333-131959) as filed on March 16, 2006.

3.1 Opinion of counsel as to legality of securities being registered (to be
filed by amendment).

3.3 Opinion of counsel as to the Trustee and the Trust (to be filed by
amendment).

4.1 Consent of evaluator (to be filed by amendment).

4.2 Consent of independent auditors (to be filed by amendment).

6.1 Directors and Officers of Advisors Asset Management, Inc. Reference is
made to Exhibit 6.1 to the Registration Statement on Form S-6 for
Advisors Disciplined Trust 1539 (File No. 333-206376) as filed on
November 17, 2015.

7.1 Power of Attorney. Reference is made to Exhibit 7.1 to the Registration
Statement on Form S-6 for Advisors Disciplined Trust 1485
(File No. 333-203629) as filed on May 15, 2015.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Advisors Disciplined Trust 1656 has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Wichita and State of Kansas on March 11, 2016.

ADVISORS DISCIPLINED TRUST 1656

By ADVISORS ASSET MANAGEMENT, INC., DEPOSITOR

By /s/ ALEX R MEITZNER
-----------------------------
Alex R. Meitzner
Senior Vice President

Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below on March 11, 2016 by the
following persons in the capacities indicated.

SIGNATURE TITLE

Scott I. Colyer Director of Advisors Asset )
Management, Inc. )

Lisa A. Colyer Director of Advisors Asset )
Management, Inc. )

James R. Costas Director of Advisors Asset )
Management, Inc. )

Christopher T. Genovese Director of Advisors Asset )
Management, Inc. )

Randy J. Pegg Director of Advisors Asset )
Management, Inc. )

R. Scott Roberg Director of Advisors Asset )
Management, Inc. )

S-2

Jack Simkin Director of Advisors Asset )
Management, Inc. )

Andrew Williams Director of Advisors Asset )
Management, Inc. )

Bart P. Daniel Director of Advisors Asset )
Management, Inc. )

By /s/ ALEX R MEITZNER
-----------------------------
Alex R. Meitzner
Attorney-in-Fact*

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*An executed copy of each of the related powers of attorney is filed
herewith or incorporated herein by reference as Exhibit 7.1.

S-3